Shakespeare Blog: View from the Lake

Group 512

Financial Planning and Family Values

Written By: Kevin Reardon, CFP®

Family around outdoor picnic table image

We all know that financial planning is more than just discussions about investments or retirement planning. It brings together complex issues like taxes, insurance, estate planning, charitable giving, and education funding into a cohesive plan. But good financial planning can go even further and seek to pass on family values. How can you positively influence the next generation, both while you are alive and when you are gone?

Estate Planning

A typical estate plan gives 100% of assets at death to the surviving spouse, then upon the spouse’s passing, the assets are split evenly between children and/or surviving issue (grandchildren). Along the way, we have seen a few creative planning ideas that aim to further family values well into the future.

Here are a few examples:

Family Values Trust: Upon the passing of the matriarch and patriarch, a pre-determined percentage of the residual estate goes into a trust for the benefit of their children. The only way the children can access the money is if they do things together. The trust could pay expenses for families to vacation together, family reunions, Christmas parties, Easter gatherings, tickets to the Super Bowl, concert tickets, etc. The trust could pay for airline tickets for out-of-state family members so they could easily participate in these events. You can establish criteria that a certain percentage of the children have to agree on an expense, and a minimum number of the second generation has to participate. The goal is to keep the family together, sharing stories, and creating new memories.

Cabin Trust: Whether it is a family cabin, beachside condo, or a mountain retreat, many families seek to pass on these legacy properties to the next generation. A Cabin Trust preserves this legacy property so family members can have the same great experiences for generations to come. Often included in this trust is a funding mechanism (cash or life insurance proceeds) so the extended family can continue to maintain this property with the goal of alleviating financial arguments and financial disparity between family members.

Charitable Planning

A great way to pass your family values to the next generation is to set up a charitable trust and let your children choose the charities that receive the gifts. If you do this while you are alive, you can coach them on charities that you have contributed to over the years and explain why they are important to you. A charitable account could also be funded on your death, with children as trustees. Piggybacking off the ‘Family Values Trust’ mentioned above, children could meet a few times per year to review the charitable account and make bequests.

Education Funding

It has become more common in the last decade for grandparents to assist a grandchild in paying for college. Some contribute a few hundred dollars to pay for miscellaneous expenses, while some may contribute a few hundred thousand dollars in paying for undergraduate and graduate education. Taking this a step further, a grandparent could pay for K-12 tuition at a parochial school. This helps solidify faith-based values taught at home, which may be absent in public schools. 529s can now be used to pay up $10,000 in K-12 tuition costs, which extends the tax benefits of these types of accounts to pre-college expenses.


Owning life and disability insurance to protect your family can be a strong financial planning tool. As children become adults and have families of their own, parents can make sure children are properly insured to protect the precious grandchildren. Parents can buy life and disability insurance on their adult children or in-laws to protect the family. Of course, you cannot buy insurance on someone without their knowledge, so having a heart felt discussion about the importance of insurance is a strong value statement. Frequently, the adult children recognize the wisdom of their parents and will takeover premium payments as cash flow allows.

Annual Family Meetings

The best way to pass on family values and have crucial conversations with family members is to have an annual family meeting. No need to beat around the bush—just schedule a meeting and talk about what is important to you. A key part of initial meetings is the parent telling the adult children more about their estate plan, what their end-of -life intentions are, a little about their financial situation, and other important family issues. As the years progress, you will be able to challenge your children to participate in values driven decisions.

Growing and managing wealth is a critical part of every financial plan and is certainly rewarding. Passing on your values to children and grandchildren is priceless. Your Shakespeare team is well versed in hosting family meetings and would be happy to provide agendas, questions to think about, and input on customized ideas to help pass on your family values. Call your Shakespeare team and begin the discussion for passing on your legacy.