3 Keys For Successful Family Financial Planning

There are three questions that every family must answer if they want to do comprehensive and integrated planning. If you...

There are three questions that every family must answer if they want to do comprehensive and integrated planning. If you tackle the questions below, in order, in a thoughtful manner, your family will be on your way towards maximizing your giving output and impact.

1. How much is enough for us?

How much is enough to provide for our chosen lifestyle? This question is tough as many families don’t want to commit to a number. To add to the difficulty, other thoughts often leap to mind, such as, “Well, what if this or that happens?”, “How can I be sure this amount will be enough?”

None of us know the future and there will never be a number that will give absolute security. The best counsel is, if it is hard to decide on how much is enough, get started with a number that gives you good margin.

2. How much is enough for our heirs?

What is your view on inheritance? Is an inheritance a required obligation we owe our heirs? Or is it an optional gift we can feel free to bestow on them if and when we choose to?

The next step is to determine the purpose of an inheritance. Do you want your children’s inheritance to fund lifestyle or opportunity?

Warren Buffet has an interesting perspective on this. He says, “I want to give my children enough that they feel like they can do anything, but not so much that they might choose to do nothing.” Many of the families we work with resonate with this statement. They want to give opportunities, but not provide for a lifestyle that could negatively impact their children.

As you gain clarity on your view and purpose for an inheritance, you are ready to calculate how much of an inheritance would be appropriate for heirs and when it would be best for them to receive it.

3. Who gets what is left over?

Once you are clear on how much is enough for you and how much is enough for your heirs, you can find out what your capacity is to give to causes that you believe in.

Many times families are hesitant to give because they are afraid of running out of money. Once we are confident that we have planned to cover the amount we need, then we feel more release to let go of the excess.

Watch out, this can become very exciting.

Gisle Sorli lives in Alexandria, Virginia and is a designated Certified Financial Planner, CFP® and a Certified Kingdom Advisor®, CKA and Five Capitals coach.