Only 15% of respondents in a recent Fidelity Investments Caregiving Study say they actually put a caregiving roadmap together, mapping out key roles and responsibilities for all family members who commit to getting involved. The data demonstrates that at every stage of the caregiving process—from deciding how to provide care, to the point at which caregiving is no longer being provided—those with a caregiving plan found the experience far less mentally stressful and can help with the unexpected.
According to Kulik, LPL and others in the industry have invested significant resources in senior investor protection programs. “From cognitive decline, elder fraud and retirement security, there’s work to be done to help educate advisors what to look for during family meetings. It’s vital that multiple generations of the family get and stay involved,” says Kulik.
To help ease the financial burden on families, one estate planning strategy to help families plan for the longer term is a multi-generational trust which can be designed to leave money to future generations, without incurring estate taxes. “As part of an estate plan, we typically help families invest in a traditional mix of stock and bonds within the trust, which can help you control what happens to your assets for your remaining years and even after death,” says Martin.
Charitable Giving Becomes Family Giving
Another important aspect of the family conversation surrounds charitable giving. From donor-advised funds (DAFs), family foundations and planned giving efforts, G2 and G3 won’t always adopt the same legacy as their parents or grandparents. And why would they?
Still, parents can communicate their values and wishes—and hope for best after they are gone. It’s been said that the greatest gift one can give is not money, it’s the family values that can endure for generations to come.
“It feels like we’re at an inflection point in financial planning and wealth management,” says LPL’s Kulik. “The great wealth transfer to the next generation has begun and those advisors who can use their empathy skills to create and nurture deeper connections with their clients will see the greatest gains. If you’re working with clients who run a family business, it’s critical that G2 knows that as their advisor, you are looking out for the family business—an asset that may both store the legacy of the family’s values as well as provide employment and income for future generations,” adds Kulik.
Seeking Support From The Advisor Community
Over the next year, Next Chapter*, an industry-wide group of leaders and innovators from the financial services community, seeks ways to incorporate family conversation and empathy trainings, tools and resources into everyday activities for advisors to better serve their clients.
If you or others at your advisory firm can provide details on any of the above scenarios based on your work with existing clients, please contact Steve Gresham at [email protected].
David Conti is a NH-based writer and editor. His work on personal finance and retirement topics has appeared in FORBES, MarketWatch, Financial Advisor and Fidelity.com. Contact him on LinkedIn.
*Working for the greater good, a group of more than 30 industry leaders built Next Chapter—a think tank/take action team focused on retirement. It’s sponsored by the Execution Project, Financial Advisor and the Money Management Institute, and we are working on behalf of the MMI’s 180+ member companies and FA’s 200,000+ advisors.