Time to Hold a Family Financial Meeting?



By iA Private Wealth, October 11, 2023

When thinking about family gatherings, you might focus on special occasions like holiday meals, birthday parties and anniversary celebrations. These are all good reasons to bring generations together, but there’s another gathering that’s equally important: the family financial meeting.

Granted, discussing your health care needs and estate plans can be difficult and uncomfortable, but it benefits the entire family when everyone’s on the same page regarding your intentions. Financial matters can be emotional and contentious, so a transparent discussion may reduce misunderstandings, disagreements and conflict. In turn, you’ll gain peace of mind knowing your legacy wishes have been fully and effectively shared.

Topics to discuss

You know best how your family dynamics tend to play out, so take them into consideration when deciding who should attend the meeting. It makes sense to include all the children, but whether their spouses/partners and children are invited is your decision based on best judgement. The frequency of financial meetings depends on the circumstances, but it’s often valuable to hold one whenever there’s a significant change, such as retirement, death in the family or a notable monetary event like a business sale or recent inheritance.

Below are seven topics commonly broached at family financial meetings – they might not all apply to your situation, and you may have others not listed here:

  1. Living arrangements (e.g., aging in place; downsizing; staying with family; moving to another city, province or country; residing in a seniors community/nursing home)
  2. What to do with the family cottage or other properties
  3. Your choices for executor and power of attorney, along with the reasons why
  4. Intention and directions for potential incapacitation, end-of-life care and funeral proceedings
  5. Wealth distribution as part of your estate plan (e.g., how you want to divide your assets and special possessions, whether grandchildren are included, your philanthropic goals); provide a rationale for these decisions so your loved ones understand the “why”
  6. If you own a business, what’s your succession plan? Will family members be involved? Will you sell?
  7. If you have insurance coverage, inform your loved ones about policy details

The family meeting is also an opportunity to discuss the “softer side” of finances, such as your views on money, the struggles you may have faced when building wealth, and how you envision loved ones managing their own finances. Imparting wisdom you’ve gained over the years is a great way for family to learn from you and engage in meaningful dialogue about money and financial responsibility.

What makes a successful family meeting?

Emphasize that this isn’t a typical gathering, although a social component could be added once the formalities conclude. Try to strike a balanced tone: it’s a serious financial meeting with weighty or emotional topics, but it doesn’t need to be sombre. Investment Advisors, lawyers and accountants usually don’t attend, but they can be involved in meeting preparation, especially helping to explain technical terms or complex concepts you may need to address. Give people enough time to digest all the information. Since you might not resolve everything in one go, book a follow-up meeting if needed.

In-person conversations are ideal because it’s easier to “read the room” and communicate effectively, but if some people can’t attend, a virtual or hybrid meeting may work. You could hold the meeting at your home for familiarity’s sake, but anywhere that’s comfortable, reasonably free of distractions and conducive to open discussion will suffice. Create and distribute an agenda in advance so participants are aware of the subject matter and can prepare questions or comments.

Also adhere to basic “rules of engagement,” such as not interrupting speakers and not making personal attacks, so the meeting proceeds smoothly and the conversation stays respectful – even when objections are being voiced. When your meeting ends, summarize the discussion, share next steps and assign required roles and responsibilities. Be sure to keep your advisor and related professionals abreast of decisions emanating from your family meeting, so they may continue advising you in the best way possible.

This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.

Related insights

It’s Year-end: How Will You Manage Your Expenses?


By iA Private Wealth, November 23, 2023 As we approach year-end, it’s a great time to assess your expenses with the goal of setting yourself up to be financially stronger. New year, fresh start. When expenses are under control and you’re in a position to build wealth instead of spiralling deeper into debt, it helps you work toward reaching your short-term and longer-term financial goals. So, how can you resolve to manage expenses at year-end? Here are a few tips to get you on your way. Create a wealth plan. If you don’t already have an advisor, here’s the first New Year’s resolution to make. Everybody has specific objectives to achieve, and a comprehensive plan can give you a head start on next year’s finances. A professionally developed wealth plan will account for your unique circumstances, objectives, time horizon and risk tolerance. It helps you save and invest wisely, manage debt obligations and be more tax efficient. Also, it can adapt to changing circumstances so your plan stays relevant at any life stage. Since it requires significant training, skill and experience to create and maintain a personalized wealth plan, it’s best to work with a qualified advisor. Maintain a budget. A key aspect of wealth planning is setting a budget. Basically, a budget tracks your sources of income and expenses over a given time period (e.g., monthly). It provides an ongoing snapshot of how well you’re managing money and where improvements might be possible. With holiday season in full swing, an increase in social outings and gift buying can quickly send your expenses into overdrive. This year-end, be mindful of expenses and mounting debt by setting a reasonable holiday budget and sticking to it. Consolidate debt. The amount you spend over the holidays is largely discretionary, but sometimes carrying debt is unavoidable. Many people have mortgage payments, car loans, home-related expenses, etc. An advisor can review your various debt obligations, working with you and your financial institution(s) to see if it’s advantageous to consolidate debt into one relatively lower-rate loan or line of credit. Consolidating debt is often a practical way to lower your overall expenses. Commit to saving. While reducing debt is important, the flipside is to increase your savings. A proven strategy is to “pay yourself first” by putting a set amount (e.g., 10%) of each paycheque into a savings and/or investment account. It’ll build long-term wealth while helping you avoid the temptation to overspend. Also, year-end is a great time to devote money to registered plans for the following calendar year. For instance, on January 1 you can begin making that year’s contributions to your RRSP and TFSA. Not only will it help curb expenses by “forcing” you to save, but you’ll also begin enjoying tax benefits sooner in the year. Another aspect of saving is putting away money for emergencies like job loss, major home/vehicle repairs, serious illness, etc. You never know when you’ll need immediate access to cash, so an emergency fund – many experts recommend a minimum three months of household expenses – is essential for financial preparedness and peace of mind. Although any time is a good time to get a handle on your expenses, the year-end period often sparks motivation for people to focus on their finances and make improvements for the year to come.
Paying for Post-Secondary Education


By iA Private Wealth, August 23, 2023 Higher education provides many benefits to students, such as building a career foundation, expanding social skills and learning responsibility. However, this education can come at a steep cost. The price tag will depend largely on whether or not your child attends a nearby school. If your child is still years away from post-secondary education, you’ll need to budget for inflation as well. Major expenses With proper planning and budgeting, many families can manage an investment in the child’s future. Before exploring different ways to pay for education, let’s consider the three primary expenses. Tuition: Factors that impact tuition include the school and program, whether your child attends full-time or part-time, and your child’s citizenship status. Also plan for the cost of school supplies, books and other course materials. Accommodations: The cost is mostly dictated by living arrangements on or off campus (e.g., if your child rents solo or has housemates/roommates). Food expenses may involve a campus meal plan and/or groceries, dining out or eating at home. Other costs to consider include hydro and utilities, phone, internet/cable, insurance, clothing, personal care and entertainment. Transportation: These expenses will vary. Students staying at home might rely on public transit, ride sharing, walking or cycling. Some may need (or choose) to drive, which means using a family vehicle or buying their own, and paying for maintenance, parking, insurance and fuel. If your child moves away, plan for transportation costs while at school, plus costs for roundtrip travel (car, bus, train or plane) whenever they return home. Making ends meet Once you gain a sense of the costs involved, the other part of your budget pertains to covering these costs. A budget organizes your expenses and income, and helps determine if your finances are on track. Here are five common sources of money to help pay for post-secondary education: RESPs. The Registered Education Savings Plan (RESP) is a proven way to save for school. Not only is investment growth within the plan tax deferred until withdrawal, but if the student is in a low tax bracket when they use the funds for schooling – which is often the case – the tax impact will be minimal. As well, they may qualify for benefits like the Canada Education Savings Grant and Canada Learning Bond, which provide additional funds for education. Personal savings. The student may opt to use some of their accumulated savings for school, plus parents and grandparents are often able and willing to help out. Borrowing. The federal government offers financial assistance to students in need. Your child may be eligible for a government grant or loan; if approved, they can use the money for school-related expenses and won’t begin repaying until after they graduate, according to a specific schedule. Provincial governments may also offer funding, so check with your province for information. Scholarships. Students with strong academic standing could be eligible for a range of scholarships. Scholarships Canada and the Government of Canada’s scholarships website are great places to start. High school guidance counsellors also have current information on scholarships and bursaries, plus they can offer direction on the application process. Employment earnings. Many students build savings by working in the summer and part-time during the school year. You can guide your child on what employment opportunities may suit their experience, skills and interests. Remind them that earning money for school is great, but education should be prioritized and their work schedule must allow enough time for classes, study, assignments, etc.
Take Advantage of High Interest Rates


By iA Private Wealth, August 8, 2023 Central banks in Canada and the U.S. have raised interest rates very aggressively over the last year to fight soaring inflation, putting a significant amount of strain on borrowers. But high interest rates have a silver lining: they give savers and savvy investors a great opportunity to boost their return potential. Here are six ways you can take advantage of high interest rates: Bank stocks. Banks usually generate more profit as the spread increases between the interest they pay to lenders and the interest they charge borrowers. When market rates are low, there’s less ability to widen spreads. Energy stocks. Inflation lifts the price of most products, including energy. While other factors (like supply and demand) also influence energy prices, oil and gas prices are being well supported during this period of high inflation, so energy stocks might be worth a look. “Price-maker” stocks. Some companies can pass along the higher cost of production to consumers without any meaningful reduction in sales and profitability. Many such companies (e.g., grocers, drugstores) are in the consumer staples sector. Floating rate securities. As the name implies, the yield on these securities rises or declines according to general changes in interest rates. Real return bonds. Issued by the government, these bonds are pegged to the Consumer Price Index (CPI), which tracks the inflation rate of key goods and services. They pay interest based on the CPI, so real return bonds may help protect investors against inflation. Savings products. Guaranteed investment certificates, high-interest savings accounts and money market funds can help savers earn more income. Since the income they generate is linked to the central bank policy rate, savers benefit when interest rates are high. Contact your Investment Advisor to discuss how your investments can be positioned for today’s high-interest-rate environment.
Enjoy a Budget-Friendly Summer


By iA Private Wealth, June 22, 2023 Summer has arrived and with it comes hotter days and warmer evenings – perfect for getting outdoors, travelling or gathering with family and friends. Although it’s tempting to pack these sun-soaked summer days with activity after activity, be sure to keep your finances in mind. It doesn’t take much to derail a budget. The cost of taking a vacation or two, enjoying regular meals or drinks on restaurant patios, and attending special occasions like weddings, concerts and sporting events can add up quickly. Of course, that’s not to say you shouldn’t enjoy summertime, because who doesn’t want to take advantage of Canada’s precious few weeks of beautiful weather? Just be realistic, stay conscious of your spending and don’t lose focus on your financial goals. Here are five simple tips for a budget-friendly summer: Create a summer calendar. You can’t map out each day since circumstances change and all the planning in the world won’t account for the surprises that are bound to pop up. However, you can pencil in key dates that are certain, such as a vacation, wedding or summer camp for the kids. Establish your costs. Once you’ve identified key activities on your summer calendar, estimate the cost of each one. Certain activities will be easier to price than others, but give it your best shot. Then add up the expenses and compare that total with how much you can reasonably budget for these events while also meeting your other financial obligations, including saving and investing for the future. Make adjustments if required. If you’re like most people, your summer wish list may exceed the money you have available. That’s okay – everyone must revise their list occasionally if their overall budget dictates. You might need to make some decisions regarding how to stay on budget, which leads us to the next point. Develop a spending plan. If you can’t squeeze in everything without overspending, create a spending plan that works for your budget. For example, if vacation expenses are running high, consider different destinations, shorten the length of your trip or cut back on the activities you had planned. Or, if you’ve been invited to several weddings, attend the higher priority ones (such as immediate family or close friends) and be mindful of gift costs. As you go through this exercise, keep in mind recurring expenses that may rise in the summer, such as your hydro bill when the air conditioner is running, or your fuel bill if you’re driving more. In addition, your water bill may jump if you have a garden or lawn, or if the shower gets an extra workout in the hotter months. Consider alternatives. If you’re willing to be flexible, you can still have a great summer while spending within your allocated budget. For instance, avoid the typical summer travel destinations that are unduly expensive given high demand. Instead, off-peak travel is more affordable, so shop around online. Many parts of Asia tend to have wet summers that keep tourists away, while tropical areas like Hawaii and the Caribbean are quite hot in the summer. Don’t let less-than-ideal weather conditions prevent you from exploring all the beauty and fun that these locations offer. Staying local and doing a few day trips can also be entertaining for the family without blowing up your budget. Also consider exploring nature while taking a nice walk or hike, hanging out at the beach, camping, attending outdoor festivals or holding a picnic in the park. With a little imagination, you and your family can come up with a bunch of ideas for enjoying summer on a manageable budget. Talk to your iA Private Wealth Investment Advisor about your wealth plan and to see how summer activities may fit into your overall budget.
Should You Rent or Own in Retirement?


By iA Private Wealth, May 18, 2023 If you’re approaching retirement, it can be both exciting and stressful. Sure, after years of juggling a full workload along with family and other obligations, having the freedom to set your own schedule is enticing. However, given the recent spike in inflation and subsequent high interest rates, the basic cost of living has jumped significantly. Money isn’t going nearly as far as it used to, and you might be wondering if you’ve actually saved enough to enjoy your retirement years. Running out of money is a legitimate concern. Many retirees live on a fixed income, such as government benefits, a company pension plan and maybe RRIFs or annuities. While some income sources are indexed to inflation to help keep pace with rising costs, ultimately you’re drawing down on your money in retirement, rather than growing wealth as you did when working. Nobody wants to experience a shortfall that may require amending retirement plans or result in financial insecurity. Should you sell your home? One possible solution as you enter retirement is to sell your home and rent instead. Although renting isn’t typically a goal for people who already own their home, let’s consider the potential benefits of this strategy. Real estate values in Canada have declined somewhat as higher mortgage rates dampen the enthusiasm of prospective buyers. However, if you’ve owned your home for several years or even decades, chances are you’ve built considerable equity in that property as housing prices have risen steadily over time. If you sell your home and rent when you retire, you’ll have a tidy sum of cash available. Some of it can be put toward regular living costs and discretionary expenses like a vacation, a new vehicle or pursuing hobbies. You may also wish to invest for the future. With guidance from your Investment Advisor, you can decide how to allocate your money across various investment products. Having the potential to grow your assets through investing is a proven way to extend how far your money can stretch in retirement. Over longer periods, the stock market has generated higher returns than real estate (here’s one study as an example), so relying on the value of your home might not be the best option to achieve long-term growth. Also, investing in a range of securities provides diversification as you tap into different sources of growth potential. This approach may help reduce overall risk if one (or more) of your investments declines in value at a given time. On the other hand, when the bulk of your assets is invested only in your home, you may face a sharp decline in wealth if the real estate market weakens. Three other benefits of renting Home ownership involves maintenance and repair costs, property taxes, insurance, utility bills and other expenses that add up in a hurry. The older your home, the higher the expenses could be. Also, the older you are, the less likely you’ll want to deal with the maintenance and repairs. Renting will shift the burden to your landlord. Property taxes usually increase each year, taking a bite out of your retirement savings and cash flow. If you sell your home, you avoid property taxes, plus capital gains from the sale of a principal residence are tax exempt, leaving more money in your pocket. Selling your home gives you flexibility to decide where to live. Maybe you want to move to a warmer climate or be closer to children and grandchildren. Perhaps relocating near parks, golf courses or other preferred amenities is appealing. Selling also provides an opportunity to downsize from a large house to a condo or apartment, for a more carefree lifestyle with less hassle and fewer responsibilities. Speak with your Investment Advisor for guidance on which approach is best suited to your unique needs and goals. <!-- We can help you with a wealth plan that addresses tax efficiency, so contact us today. -->