How can you keep your family thriving both financially and personally over many generations? It can certainly be through structures such as trusts, but just as important are planned gatherings where two or more generations within the family can discuss values and goals, the stewardship of wealth, and opportunities for shared learning. We sat down with LNW Wealth Manager Lauren Martin to find out what’s required for effective family meetings and how she helps clients prepare for them well in advance.
Q&A with Lauren P. Martin, LNW Wealth Manager
Lauren, you have been facilitating family meetings for more than a decade as part of your work with clients. Why?
Lauren: Well-planned family meetings can create a strong foundation for multigenerational wealth that is potentially as important as the
investment management and estate planning we do for clients. That’s because sharing stories of where you came from has been linked to improved self-confidence in children. Starting there and building with shared family values and aspirations creates important context for what is being handed down to them, why, and how to use that to enhance their lives and those of others.
Getting two or more generations together for four to five hours is special (and challenging!), so you want to use that time wisely. Above all, the first meeting has to be engaging so everyone looks forward to the next one.
How do you prepare for meetings?
Lauren: Long before planning for the first meeting begins, I think a Family Mission Statement created by the generation that controls the wealth (usually our clients) is foundational. It does three things: defines their relationship to wealth, highlights the messages they want to convey, and helps us see how well (or not) their wealth and estate plans align with those messages.
We often work on Mission Statements years in advance to develop a guiding vision. This can be fine-tuned using input from future family meetings and as the younger generations assumes more financial responsibility. It importantly sets a precedent for thinking about wealth intentionally and in line with values and beliefs: “Here’s why we set up this trust or this foundation; it goes back to these value(s)…”
What else is important?
Lauren: Another key aspect of family meetings is that at least two generations should be able to attend and fully participate. A third generation, from pre-teens to young adults, is often included depending on interest, capabilities and availability.
Before and after family meetings, we can work with younger generations separately on basic knowledge and skills around budgeting and saving, debt management, and Investing 101 etc.. For very young kids, we help the parents introduce the concept of choices around money — save, spend, or share – and how to put those into action.
As you can see, it’s a multi-year process working up to the first multi-gen family meeting. In my experience, it could be two or more years after the initial discussions before the first family meeting occurs.
How do you set the agenda for meetings?
Lauren: The Mission Statement serves as a guide, but we also need specifics as to what the family leaders want to share in terms of how values are being put into practice (see box on next page for key questions used to set agenda).
At the first meeting we may not be talking finances or numbers at all. It could be more about the family history and legacy, how that shaped the leading generation, what elements are being memorialized and passed on. There is great data that points to children being more confident, happy, having higher self-esteem, and being emotionally healthy when they know their family history; I can’t think of a better way to start the tradition of family meetings.
How do you help clients define values, which can be pretty abstract?
Lauren: That is definitely a challenge. Values tend to be embedded in actions, but they’re not always articulated or discussed, especially in relation to money. So we try to get at values and also subconscious associations with money using tools that help to illuminate intent.
One of the tools I use is “Motivational Values” cards from the nonprofit 21/64 (I’m a 21/64 Certified Advisor). Basically, this is a deck of cards each with a single word on it – it could be compassion, responsibility, integrity, or community, etc. – and we ask which of these resonate with you and why? We do this exploration with clients and then at their family meetings.
It’s really interesting to see people from different generations explain why they chose a certain card. The more they get into explaining why, the more likely they are to use words that are similar. Because of these types of exchanges, the leading generation might end up choosing to reword certain things in their Mission Statement, and this fosters shared learning and a multigenerational view on the stewardship of wealth. When younger generations feel included, they are more engaged and more likely to help set family meeting agendas in the future.
FAMILY MISSION STATEMENT
Lauren Martin has found that the most effective Family Mission Statements are one to two pages and include the following:
Short Intro: Purpose of document and intent to make a clear statement of values
Topics
Family history and the inheritance of traits and values
- Which traits of your ancestors do you most admire?
- Beliefs you have about family, wealth, and life
- What has wealth afforded your family?
- Do you have additional responsibility because of your wealth?
- Wealth transfer goals as it pertains to values and legacy
- How do these values show up in your annual gifting, estate planning, philanthropy, etc.?
- Hopes for children and future generations
What are subconscious associations?
Lauren: Quite often people don’t realize how much they have internalized about how money was dealt with when they were growing up. And that’s compounded by the generational silos and silence that sometimes go with significant wealth.
One approach I use is to present common money messages such as “you have to spend money to make money” “don’t spend the principal” “money can’t buy happiness,” to see which resonate most. In talking through that, people are often taken back to a moment in time and see what an impact, sometimes negative, a certain message has had on them. We can then work with them to flip the message around so it can be passed on in a positive way.
What is your role as family meeting facilitator?
Lauren: As family wealth manager and meeting facilitator,
I help develop the agenda, advise on location and logistics, and at the meeting for shared learning or discussion, I strive to be as unintrusive as possible while leading the discussion and giving everyone a chance to participate. I take a more active role when bringing educational topics. I also take notes and action items that are important for follow-up and to keep things moving forward.
It’s tremendously helpful for everyone, I think, to have already developed relationships with all the different generations in the family prior to the meeting. Trust with each family member is crucial, and the ability to know each individual on their own as well as in the family setting helps me lead with family dynamics in mind but always maintaining confidentiality.
What about families that already meet regularly, to operate a business or run a foundation?
Lauren: Families that already work together to manage a business or foundation usually meet to focus on specific issues related to that entity. I would say they also need to step back and hold meetings that are more general in scope and cover things like the values and purpose of family wealth or just to celebrate being together in a non-business setting. Those types of big-picture discussions can sometimes help resolve thorny issues that arise when running a family business or foundation.
1ST MEETING PREP
- Why are we here?”
This a great place to start: What is a family meeting, why are they important, what is everyone’s role, and how will meetings be structured.
- What money messages have already been communicated, consciously or not?
- What work LNW will do individually with the younger generations, and how can those sessions be woven into a group setting?
- Will money be given away as a family or through a philanthropic entity?
- Will info on trusts be shared and how and why they were set up?
- Will the overall estate plan be discussed and how the distribution of assets aligns with core values?
- What else should be communicated?
When, where, and how often should family meetings be held?
Lauren: Nothing is typical when it comes to family meetings! In general, every 18 months seems to be a good cadence for meetings. Scheduling multiple households is hard, and we also need time to figure out what will be covered, prepare an agenda and arrange for outside presenters on special topics, if that is warranted.
Usually, meetings will last four to five hours for two generations attending (including a working meal), and two or more days if three generations. Generally, I would say a third of the time is dedicated to shared learning and two-thirds is educational (philanthropy, investments, stewardship, etc.) Often, some of the best conversations I have with the younger generations happen AFTER the meeting as we’re all having dinner together. That’s a totally relaxed setting where they’re free to say more about this or that and have side conversations.
As to location, I would say wherever people feel good and comfortable. It can be a family home or everyone goes to a retreat to get away from their routines. If necessary, meetings can happen online if everyone is comfortable with that, although in-person is preferable, especially for the very first meeting.
What are some of the issues that can be stumbling blocks for younger generations?
Lauren: There is no shortage of issues that arise for young people. If I had to distill these to the three most common, I would say:
- Lack of Independence: Will they be put in a position to have to ask a parent or family friend/ advisor for money, such as trust distributions? Also, will they be made to feel that they didn’t earn their own money or make their own way?
- Conflicting views on philanthropic giving – are all values shared? Are some conflicting? If some are conflicting, how could that affect grantmaking across generations? Sometimes, younger generations can be burdened by this because it feels like mom/dad’s, grandmom/ grandad’s money.
Guilt (that comes from privilege): In the context of philanthropy, young people might be giving away money to those who have nothing. They may feel insecure or guilty since they are having to determine what someone else needs when their needs couldn’t be more different.
So how do you help young people deal with these concerns?
Lauren: We try as much as possible to flip the concept of privilege. By that, I mean reframing so that younger generations do not feel the weight of privilege but the opportunity it affords them. That comes from knowing what they’re inheriting and the family history but also answering the big questions: Who am I? What are the things I value? What do I want to do about it? They might not yet have answers to those big questions, but in talking and thinking about them they start to see that the great opportunity they have to do something that is meaningful to them.
