Crafting Your Legacy to Pass on Values, Not Just Assets

Estate planning can be difficult for parents to discuss with their children — especially if there are complicated relationship dynamics — because money and power are often viewed as being interconnected. But if we dig deeper into wealth management, it’s only one part of a legacy to consider.

In a 2023 survey, 65% of adults aged 50 and over said values and life lessons are the most important thing to pass on to heirs and loved ones, while 22% said financial assets are most important.¹ Given this information, it’s clear that a traditional estate plan may not be enough to accomplish all the goals you have for your family after you die.

So, how do you ensure that your values and money are interconnected in your estate plan?

The importance of a legacy plan

While an estate plan typically focuses on legalities such as your financial assets and expenses, medical directives, and tax complexities, a legacy plan involves broader instructions based on your values, morals, and ethics. It is relatively easy to pass on financial assets and hope your values go with it. But, if you haven’t created a legacy plan with the same thoughtfulness that is used when managing your wealth, your family could end up “shirtsleeves to shirtsleeves in three generations.” This common phrase refers to wealth gained in one generation being lost by the third generation. It demonstrates that a lack of guidance can lead to your heirs feeling unmotivated, unhappy, or unsuccessful, and they may not properly utilize all the benefits that come with the financial assets you leave behind.

Communicating your values in a family meeting

Most of us think we are done with estate planning when we sign the documents. Addressing your tangible assets is only the starting point. Taking proactive steps to discuss your intangible legacy can greatly impact the next generation and is essential for empowering them to continue helping them carry on your tradition.

Family meetings are one way to facilitate this transfer of knowledge. It serves as a platform for conveying to your heirs your expectations regarding their conduct and values in relation to their inheritance following your passing. If the meeting is done well, and with professional support, most adult children are thankful that their parents gathered them together to discuss a legacy plan.

Topics to communicate in the meeting might include:

• Sharing cherished family values and stories of life lessons
• Outlining your estate documents and conveying your related intentions
• Explaining your rationale for giving financial assets/property to certain family members or charitable organizations
• Providing detailed funeral or memorial instructions
• Answering questions about your desired future living arrangements and health care, including caregiving expectations and shared responsibilities
• Read more on talking to adult children about end-of-life preparations.

Tips for a productive family meeting

• Develop and distribute an agenda in advance. For a family meeting, this step might seem overly formal, but having a clear idea about what will be shared and discussed will allow you and your family to focus on the tasks at hand.
• Pick a neutral location. Given that sensitive topics may be part of the conversation, it’s a good idea to have the meeting at a location that is not loaded with history and emotion, such as the family home. A change of scenery can also affect attendees’ mindsets so they absorb and think about topics differently than they would in a familiar environment.
• Set ground rules. Before the start of the meeting, establish and communicate guidelines about who gets to speak and when, and how people can signal that they need a break. Try to keep the atmosphere positive and open, so that everyone feels comfortable sharing their thoughts and ideas.
• Close with a plan of action. Towards the end of the meeting, summarize what was discussed. If there are issues that still need to be resolved, determine who, how, and when that will occur. It might also be helpful to send out a written communication after the meeting, helping to ensure everyone has a clear record of what was discussed and any expected actions.
• Consider a third-party facilitator. This role can help the meetings stay focused and productive — and minimize an elevated level of emotion that may arise from having a difficult conversation.

At Mercer Advisors, we are often asked to serve as trusted advisors at these kinds of family meetings. We facilitate the discussion and provide our clients with the opportunity to: share wishes with loved ones, including end-of-life decisions; convey expectations for handling financial assets; and help resolve family conflicts in a comfortable environment.

To get help with building a legacy plan or facilitating a family meeting, contact your advisor. If you are not a Mercer Advisors client and want more information about estate planning and legacy planning, let’s talk.

1.The New Age of Aging”, Age Wave, 2023.