Host a Family Meeting To Discuss Your Estate Plan

If you're a family business owner with a high net worth, you may want to gather your family members together to discuss the details of your estate plan. Doing so can be especially important if you own a business that employs family members. These meetings are a little like the Scottish clan gatherings held hundreds of years ago by clan chiefs to discuss their succession and inheritance plans.

The Purpose of Gatherings

For centuries, some Scottish clans had a tradition of getting together periodically. When communication and travel were difficult, these gatherings provided a way to prepare for the future. Estate planning was simple then, with inheritances usually going to the eldest male in the family.

Of course, estates aren't so simple today. After your death, your assets will be distributed under instructions from your will, trust and beneficiary account designations — unless some of your assets aren't covered by such documents, in which case those assets will be distributed through the intestacy laws of your state. You can help your heirs accept the details of your estate plan by preparing them.

The (Private) Reading of a Will

How many times have you seen a movie or a TV show that includes a dramatic "reading of the will," where the heirs find out what they receive from the estate? These fictional postmortem readings don't generally happen today. Instead, state law determines who receives copies of a will to read privately.

In some cases, beneficiaries learn about how an estate is to be distributed only after the death of the "clan chief," or senior family member who owns the business. This often has negative consequences. Here are a couple of examples:

Details of the Meeting

Holding a family meeting to clarify your plans can help prevent angst and intrafamily squabbling. After your attorney and business succession team have completed your estate plan, and you're comfortable with it, you can ask your advisors to prepare summaries to distribute to family members. These documents can explain the estate plan in layman's terms and with current values.

Once the family summaries have been prepared to your satisfaction, it's time to call the family meeting and invite interested parties. Before the gathering, meet with the key stakeholders. This might include the person named as the executor or personal representative, those taking over the family business and perhaps any family members who may expect to take over. Hopefully, any issues with them will be resolved before the family meeting.

In addition to the family members, a representative from your succession planning team should attend the meeting. Choose someone who fully understands and can explain the legal, financial and tax ramifications of the estate plan.

As the senior family member, you (and, if you're married, perhaps your spouse) should lead the meeting. But you can certainly call on your succession planning team rep to assist in explaining your estate plan.

The written summaries that are handed out should be labeled "draft" because issues might arise that cause the plan to be revised. However, clarify to attendees that you and your spouse will make all final decisions. Conclude the meeting with an open discussion of questions and concerns. (A second meeting might be necessary to finalize everything.)

Avert Misunderstandings

The objective of this meeting is to inform family members about your estate plan and the reasoning behind it. In addition, the meeting might bring to the forefront issues among family members that need to be resolved in later, separate meetings.

In the end, an estate planning get-together can help your family be better prepared after your death, as well as avert misunderstandings and hurt feelings. It can also help sustain the family business that you have spent years building.

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