When and How to Talk About Wealth

An internship at Loyola University’s Family Business Center while she was studying for her MBA gave Celine Fitzgerald her first glimpse of the world of family businesses. It led her to learn more about her own family’s history in the banking industry — and, after graduation in 2019, to start a single-family office with her father.

“At 15, my parents told me to get a job. I had an allowance, and I worked throughout college,” says Fitzgerald, who today is president of the Fitzgerald Family Foundation, an analyst with Webb & O’Neill Capital and a legacy consultant with Legacy Capitals. But that was the extent of her financial literacy. “I didn’t really feel like I had a voice or basic understanding until I started working with the family office.”

For example, during a college break when she was 21, the family lawyers met with her to tell her about her trust.

“Why did I have a trust? What was the purpose? It was never fully explained until a decade later,” Fitzgerald says. Working with the family office “brought more clarity and presented the opportunity to meet with my family’s lawyers, accountants and any other advisors on a regular basis.”

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This type of clarity about what a family’s wealth means — and the opportunity to have input into decisions about it — is important as families grow and pass wealth from one generation to the next.

“Everyone should feel like they have ownership,” Fitzgerald says.

The importance of inclusion

Making all family members feel included in decisions is more than just a feel-good idea.

“If people feel like they are given a voice, even if they are unhappy with a decision, they’ll still support it,” says Torsten M. Pieper, an advisor with Generation6.

Exactly how to give people a voice will depend on a range of factors.

“It’s a function of the size and complexity of the family on one hand, and what they’re used to on the other,” Pieper says. “It also depends on the type of decision you’re making. If it’s ‘Should we get out of this industry and into another one?’ that probably requires more conversation than ‘Should we paint our summer house red or beige?’”

Another factor to weigh: Who, exactly, are the family members who get a voice? How old do children have to be, for example, before they are included in decisions? And what about spouses?

“We have some families where everybody is involved – anyone who married in, stepchildren, anyone. There are others who are very conservative,” Pieper says.

Promoting healthy discussions

Here are some tips for making sure every family member feels heard:

* Start with your purpose.

“The 10-year plan or 20-year plan should be a starting point for a family coming together to do anything,” Fitzgerald says.

Why does the family have a family office? What is the goal, and how is the office helping the family work toward that goal? One obvious time for this conversation is when the family first establishes an office. But discussions about the purpose of the family office can be helpful even long after the office is established, as a way to integrate family members who have grown or married into the family.

* Meet face to face. In-person gatherings can help cement bonds among family members and make decision-making easier. They can also provide a place for educational sessions, including for next-generation family members and new spouses. And they can provide a forum for bringing in lawyers, accountants, investment advisors and others to allow for an open discussion.

“All family members, regardless of their involvement in the office or business, deserve to have basic understanding of the wealth which leads to the estate plan,” Fitzgerald says.

Families with an operating business may include in their gatherings a visit to the company — which may be an important source of shared identity. And for families without an operating business, in-person meetings take on additional importance.

* Use the family council. If the family already has a council, its members can help make sure all family members feel that their voices are being heard – through individual conversations or written communication.

“A family council can help you have a decision-making organ that represents the family members,” Pieper says.

The way council members are elected can help determine how they can best communicate with their family members. Some councils, for example, include representatives of each branch of the family, creating clear lines of communication.

* If necessary, start small. If it seems daunting to engage the whole family in in-depth discussions about all aspects of the family office, consider picking one topic to start with.

“Philanthropy can be a nice way to start because it encompasses family values, mission and goals,” Fitzgerald says. “This discussion will lead to more discussions on the purpose of wealth, trust distributions, tax efficient strategies and future investment policies.”

* Allow time for adjustment. If the family office has been in existence for a long time and new family members either join through marriage or become old enough to have a voice in family governance, it may be overwhelming for them to absorb a lot of information all at once.

“Time, space and additional resources might be needed to digest the information,” Fitzgerald says. “As Rome was not built in a day, a next-gen, a spouse or even an ‘older’ adult may need time to wrap their head around how becoming a wealth inheritor affects them.”

About the Author

Margaret Steen

Margaret Steen is the editor of FO Pro, The Family Office Professional. Based in Silicon Valley, she has written for Family Business Magazine for more than 15 years.


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