Family Financial Retreat: Life Lessons and Roadmaps

By Brett A. Coffman, Ph.D. candidate, MBA, EA

Increasingly, our Wealth clients are finding the value in bringing family members together to communicate about—and prepare for—their financial future. Here’s a description of how a family retreat might go and the keys to its success.

Three generations gather at a mountain lodge for a weekend together. John and his wife Joan have handled all the logistics, selecting a site that offers horseback riding, swimming, whitewater rafting and more. They have sketched out a loose schedule for the weekend, with just two events down in ink. Both are listed as “Financial conversations for the adults.”

Successful transfer of wealth requires a united family forged by common bonds of history, experiences and values. A well-planned family financial retreat can help build and strengthen those bonds.
Gathering for fun is nothing new for the family, but intentionally setting aside time for serious, straight-talk topics is a first. No one knows quite what to expect as John, the family patriarch, begins the first financial conversation talking about the family wealth and how it was created. Some of the older grandchildren decide to listen in. After talking about the difficult times, the sacrifices, the humble beginnings, John shares some of the life lessons learned along the way and the values he and Joan have adopted through the various chapters in their life story.

Then Joan speaks. Not only is she a mother who recognizes the distinctive qualities in each of her children, she also played an active role in the business startup and has been the ultimate source of inspiration to her husband. She describes the time when a group of people John had trusted let him down and he felt like giving up, and times when it was difficult to sleep at night because they had incurred so much debt to keep the business alive. Even in the darkest days, she steadfastly believed in John and what they were building together. They hung on and, bit by bit, the business grew from a small-town focus to a national market.

As they share their stories, John and Joan admit they have a lot of pride in what has been accomplished. But they also point out that business achievements are not their only yardstick as they look back at their lives. Their children and grandchildren are by far their number-one priority, and one of the lessons they have learned is that wealth rarely passes successfully between generations by accident. Even when all the i’s are dotted and t’s are crossed in terms of estate planning documents, there can be misunderstandings without open, clear communication in advance. They have seen too many situations where colleagues’ children fight over money, become estranged from each other, or use up their inheritance without ever achieving a sense of personal fulfillment or making contributions to their families and communities. They want better things for their children and grandchildren going forward.

That’s why these conversations are so important. They know the two younger generations have already had different life experiences than they had and will very likely have more wealth at an earlier age. It will take a special kind of strength to handle the opportunities and challenges that lie ahead for them. At the same time, there are foundational values that have defined the family, and John and Joan want and expect those to continue.

As they began preparing for this retreat, John and Joan commissioned a personal historian to record the story of their life as a family. In it are anecdotes and life lessons like those being shared at the retreat, plus a family mission statement and description of the family values. As he passes out copies of the history, John looks each child and their spouse in the eye and asks, “How are you going to add to this book?” These are powerful and yet humbling moments. The next generation knows they will never have to face some of the hardships John and Joan faced to create the initial family wealth, but where much is given, much is expected.

Solid Preparation

There are generally three elements to consider implementing when creating a viable contingency plan. These elements include the creation of a “business will,” execution of a buy-sell agreement, and access to liquidity through personal resources.

Months in advance, John and Joan took steps to ensure that all components of their personal financial strategy and estate plan were in place, working with their Wealth advisor to review all documents and beneficiaries. The advisor provided invaluable expertise in helping John and Joan anticipate questions and address potential areas of concern or conflict among siblings. Steps were taken, for example, to achieve equitable distributions among the children, as one is an active part of the family business and the others are not. During the retreat, they go over these plans with their children, including provisions made for current and future grandchildren.

John and Joan believe in giving back, and they want the family to continue that. They have laid the groundwork for a family foundation, and they use the retreat to put their children on the foundation board and empower them to work together as a family to identify meaningful causes they can support.

While much of the weekend is spent in fun activities involving the entire family, the adults regroup for their follow-up financial discussion. John and Joan have asked their Wealth advisor to be available to answer any questions and provide additional details about the strategy the couple has put into place for gifting and transfer of assets over time. In this way, information is being shared while John and Joan can answer questions in person, rather than being communicated for the first time via a legal document following their deaths.

Before heading home, the children are already beginning to brainstorm ideas for the family foundation. They leave the retreat with added respect for what their parents have achieved and what they stand for and with a clear sense of expectations as they write their own chapters in the family history.

A version of this article appeared in the Fall 2012 issue of Wealth Magazine with the headline: Retreating to Your Family Values.

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