Whether your family is planning for multi-generational wealth transfer, working out inheritance details, going through a financial challenge, or deciding on estate planning logistics, family conflict about money can occur. This can be a highly stressful experience and may lead to long-term family strife. However, with some straightforward preparation, you can successfully navigate family dynamics, preserve relationships, and keep your wealth plans intact. Here are five tips for steering through these potentially treacherous waters.
1. Define goals and purposes: Every family member needs to be on the same page in order to prevent and deal with any family conflict about money. Whether you’re working out issues of gifting, inheritance, or anything in between, all of you need to agree on your goals and purposes for your family wealth.
2. Communicate effectively: As is the case with any conflict, everyone in the family needs to communicate clearly when handling money conflicts. Effective communication can help to prevent conflicts, and if they come up, communication can also help to resolve them. Let everyone’s voice be heard equally, no matter what age or stage each family member may be. Remember that communication involves both speaking and listening. Because verbal communication can become challenging when family conflict about money occurs, try having each family member write a letter expressing their concerns and viewpoints.
3. Consider family intervention: When a family conflict about money occurs, look into calling a family meeting overseen by a facilitator. It’s common for families to hold this type of meeting when they need to discuss challenging financial issues. Work with the facilitator to define the purpose and agenda of the meeting beforehand, and communicate that information to all meeting attendees. The facilitator will keep everyone on track, productively working toward conflict resolution.
4. Educate everyone: You can prevent many family conflicts by keeping everyone informed through family wealth education, such as educating younger generations about financial literacy and wealth management. Additional education may be necessary when dealing with a family conflict about money. You can handle this through a single family office (SFO) or multi-family office (MFO).
5. Keep it confidential: It can be tempting for family members to talk to people outside the group about a family money conflict. However, everyone should resist this unwise move, which could lead to more conflicts, miscommunication, and damaged trust. Keep all communication among family members who are directly involved with the conflict, plus the facilitator, if you have one.
As you follow these tips, you will likely find that stress levels decrease while family harmony increases. Just remember, you’re all in this together, and your ultimate goal is to preserve strong family ties while keeping your wealth goals in place. Maintain a hopeful attitude that this is exactly what will occur.