This is something to bear in mind as different conversation models will work for different families. For example, some families may wish to have an adviser present at the meetings, others may wish to have an open family discussion without a third party attending.
In some cases, it may be easier if the adviser has one-on-one meetings with individuals to give them time and space to communicate their wishes.
In whatever way the family (possibly guided by their adviser) chooses to have these conversations, communicating openly about wealth transfer and inheritance tends to lead to better outcomes for the entire family.
The role of the adviser
Paradoxically, the role of the adviser is to not only be an adviser but also a coach, in particular at the start of the process.
Coaching means helping clients find their own answers.
This skill will be particularly useful when initiating conversations within families and guiding them through these difficult meetings.
The main objective at this stage is to help the families come up with an overall plan that suits all of them and delivers a positive outcome for the whole family.
This is a very individual process and the adviser is more of a guide and neutral, objective person.
Many clients immediately talk about solutions they have heard of or read about – this can distract from the actual topic of conversation.
Instead, families should focus on discussing objectives, preferences, what would and would not work for everyone, plans for the future and worst-case scenarios.
The latter is always a difficult part and the adviser should ensure that clients are aware of and have discussed these potential worst-case scenarios. Solutions can be worked out at a later stage and this is when the adviser transitions from coach to adviser.
The next section covers the factors an adviser should take into account and provides a list of possible solutions.
Another important role of the adviser is to remind the clients that this is not a one-off transaction.
Wealth transfer is an ongoing process which needs to be reviewed on a regular basis for many different reasons, such as utilising allowances on a consistent basis, further generations being added to the family, other changes in circumstances, objectives and/or legislation.
Given how difficult it can be to initiate a family discussion, having an adviser that has been with the family for many years can only make the ongoing conversations easier.
Wealth transfer advice and possible solutions
When identifying clients’ objectives in the context of estate planning, owners of capital very often focus on tax efficiency, specifically inheritance tax efficiency.
