Malvern, PA – “We frequently see a troubling situation that can easily be prevented,” says Phil Gagliardi, CPM, a planner with Hoover Financial Advisors. “A frantic call comes in from one of our client’s children. Their parent is very ill and no longer able to manage personal and financial affairs. None of the children know where any of the estate documents are located, nor do they even know the wishes of their parents.”
The dilemma is not uncommon. Generally, parents don’t want to burden their children with such issues. They sincerely believe things will work out because they took appropriate steps to put necessary plans in place. They have the will/trust, durable power of attorney and all beneficiary designations are proper. However, that is rarely enough. Communicating investment and tax planning strategy as well as ultimate hopes and requirements to the next generation is equally as important as having the documents prepared.
A family meeting is a valuable tool to ensure peace of mind and avoid friction in time of crisis. Everyone involved can ask questions and reach an appropriate level of understanding, which will help prepare children and loved ones if older family members are unable to manage their affairs. They will be ready and not burdened with an extra layer of complexity. Another benefit of this meeting is to build a relationship between outside financial advisors and family members to maintain a level of knowledge and comfort. Gagliardi offers suggestions gleaned from an article at http://www.EstatePlanning.com noting a few components and benefits of the family meeting:
1. Ask your estate planning attorney and financial advisor to be there to explain how your plan will work and why decisions were made.
2. Choose a date and time that is convenient for everyone and a place that is appropriate. The room should encourage discussion but also convey the seriousness of the meeting. Have a beginning and ending time.
3. Make a list of topics to cover. This meeting should be a general explanation of what parents have planned and why, in order to prepare family members for what they can expect and may need to do in the future. Encourage questions and discussion.
4. It is important to give children some idea of the size of any inheritance they may receive. With people living longer and long-term care expenses often lasting for years, there may be little to pass on. If the inheritance is large, it is be better to give them a realistic picture now rather than later. It is helpful to prepare a child for a sizeable inheritance so they don’t go on a spending spree, fall prey to a scam, or be afraid to use the money at all. Some people prefer to keep their wealth a secret, but it should be discussed, especially if there may be controversial issues.
More comprehensive details can be found on Gagliardi’s blog on Hoover Financial Advisors website (http://www.petehoover.com).
Gagliardi joined HFA four years ago. Prior to that, he was a trust officer with Charles Schwab Bank in Wilmington, Delaware. He is one of only 350 individuals in the U.S. to earn a Certified Portfolio Manager® designation. The planner holds a master’s degree in taxation and financial planning from Widener University.
HFA, founded by Pete Hoover, CFP® in 2005, has quadrupled in size since its inception. The firm was selected as the 2012 Small Business of the Year by Chester County Chamber of Business & Industry and the year before it was named among the top financial planners in the Philadelphia region. Headquartered on Moores Road in Malvern, HFA is an independent discretionary firm with no product ties. Services include wealth management, cash flow management, estate planning, retirement planning, financial forecasting, plan preparation and implementation, income tax strategies, insurance solutions and management of financial needs after the death of a loved one. For further information, visit the firm’s website at http://www.petehoover.com or call 610.651.2777.
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