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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

Part 2 in our Family Meeting series

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High net worth family expert Roy Williams has found that&nbsp;over 70% of HNW families fail to transfer their wealth beyond the third generation.<a href="#note1">1</a>&nbsp;He also found that strong family communication is one of the most important factors leading to the successful transfer of wealth. A common thread connecting the 30% of families who had been successful at transferring wealth was developing these effective communication skills through family meetings.

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So Why Don’t All Families Hold Family Meetings?&nbsp;

Over the years, we have heard many excuses for avoiding family meetings. We have listed three common ones below, along with the solutions we use to help families overcome their reluctance to hold meetings.

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Excuse #1. I do not want my children to know the extent of our wealth because it might remove their incentive to earn a living or cause them to feel entitled.&nbsp;

Solution: Don’t disclose the amount of the family’s wealth.

Your children likely can see that not all of their friends have the same amount of wealth, and through the internet can figure out that your family has wealth. What they don’t know for sure is how much wealth. Not knowing how much wealth they may inherit can actually lead to unrealistic expectations and can cause an uninformed lack of incentive because they are basing their standard of living on your standard, forgetting that the family wealth will be divided upon your death so there will be less available to support them. Ironically, armed with some knowledge, your children may be more incentivized to work because they have a sense of the amount they will inherit and the additional amount needed to maintain the lifestyle they desire.

Further, not talking about money and failing to openly discuss social responsibility and why working at a meaningful endeavor is important can actually lead to feelings of entitlement, especially in the third generation and beyond.<a href="#note2">2</a>&nbsp;Nonetheless, if you are uncomfortable disclosing the extent of the family’s wealth, family meetings without this information can still be productive to:

Inform your children that they will have some responsibilities to manage wealth in the future.

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Share your goals and expectations (i.e., that you hope the family wealth does not prevent them from pursuing a meaningful career or endeavor because self-confidence and happiness are derived more from contributions to society rather than from wealth).

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Excuse #2. I feel uncomfortable discussing money with my children.

Solution:&nbsp;Utilize a trusted advisor to facilitate the meetings.

We understand your reluctance. Money is the elephant in the room that is not discussed. How much should you tell your family? How do you bring up the subject?

Luckily, you don’t have to do this alone. A trusted advisor such as your attorney, professional trustee or investment advisor can lead this topic at a family meeting and help you have age-appropriate discussions about the family’s wealth. Further, a trained professional can:

Help your family learn to communicate in a more formal setting

Help you broach and navigate difficult topics &nbsp;

Make sure that everyone’s voice is heard

Keep you on topic and moving through the agenda &nbsp;

Help your family work constructively through areas of misunderstanding or disagreement

Excuse #3. My family thinks we don’t need family meetings because we talk all the time.

Solution:&nbsp;Explain the need to prepare the family’s next generation of wealth creators and managers.

Family events and meals are important for creating family bonds and giving a sense of family legacy, but they are not as effective as a formal meeting to discuss specific topics such as wealth, your goals and hopes for family legacy, and the skills needed to create and manage wealth.

Preparing your family to be successful stewards of wealth takes time and organized effort because it involves understanding the family’s legacy, developing some shared family values and educating family members about the roles of trustee, beneficiary, philanthropist and investor. Family meetings can help with this preparation.

Warner can help you start meeting as a family.

The attorneys in our Private Client and Family Office Practice have years of experience facilitating and planning family meetings. &nbsp; We believe that family meetings are vital to preserving and growing family wealth. We can help you with planning, facilitating or presenting at meetings. &nbsp; If you wish to begin holding family meetings, would like a facilitator for a meeting, or need assistance leading a discussion at your next family meeting, contact Susie Meyers or Mark Harder in our Private Client and Family Office Practice.

1&nbsp;Preisser, V. &amp; Williams, R.&nbsp; (2003).&nbsp;Preparing Heirs. Five Steps to a Successful Transition of Family Wealth and Values. San Francisco, CA: Robert D. Reed Publishers. &nbsp;

2&nbsp;Gallo, E. &amp; Gallo, J. (2002).&nbsp;Silver Spoon Kids: How Successful Parents Raise Responsible Children. New York, NY: Contemporary Books.

Legacy Matters

Private Client and Family Office

Partner

Mark K. Harder

Susan “Susie” Gell Meyers

Trusts and Estates

Top 3 Excuses For Not Having Family Meetings – And How to Beat Them

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Top 3 Excuses For Not Having Family Meetings – And How to Beat Them

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