When Richard and Janet decided they wanted to transfer a portion of their wealth to each of their grandnieces and nephews to help offset their education costs, they realized that the implementation was going to be tricky. The couple decided to bring in the Signature team to guide the conversation and help determine appropriate methods for wealth transfer. The experience was so positive for everyone involved; they came back to share their thoughts about the process.
What was your original idea for transferring your wealth to your nieces and nephews?
Richard: “We knew we wanted to support them financially in some way and had even told them that it was something we wanted to do. We just didn’t know how to implement the process.
We thought having a third party in the room to hash out the questions we had and bring in additional insights to help us come to a conclusion for how we should go about it.”
Why did you make the decision to pass wealth to your grandnieces and nephews in the form of tuition?
Richard: “We thought that was the best way to help them. We don’t have very many nieces and nephews. I have one niece and Janet has two nephews and they have four children. We understood our financial situation gave the opportunity to help them and decided that education was the best way to not only help the children but their parents as well.”
Was this a conversation you had already had or more of an unspoken understanding?
Janet: “We originally had let them know our intentions about three years ago when the oldest was still in elementary school, but we never discussed what it would look like. When it got to the point where the kids were entering high school, we knew it was time for their parents to start planning for college.
We hadn’t discussed what our help would look like or how much we would contribute. We only let our niece and nephews know that we wanted to help and left it at that.”
Did you ever think about how you would bring up the topic again to clarify your contributions?
Janet: “Yes, we thought we’d call you!”
What was the process once you reached out to Signature?
Janet: “Well, first Richard and I sat down with Julia and Seth to have a pre-meeting. Our biggest goal was to establish exactly how much we planned to contribute so our family would know how much they needed to come up with themselves or whether they would need student loans or other financial aid.”
Richard: “In talking with Seth, we decided that we wanted to put a generous amount aside for each of the four children. Whether they decided to go to Harvard or trade school, we wanted to support each equally. Once we had those conversations privately with Seth and Julia and went back and forth determining what we wanted to do, we brought in the parents to be part of the next conversation.”
Was there anything that surprised you during the meeting with the family?
Richard: “The reactions were not surprising, since they knew the general reason for the meeting and would have been appreciative of anything we offered. But I think about easily everything went. There were no really difficult moments, it was all very fluid.
Everything we discussed and all the questions that they asked were in the best interest of the kids, which was what we wanted to begin with. There was a lot of nervous energy at first as nobody really knew how it would go, but that dissolved very quickly once we all got talking.”
Richard and Janet, together with their family, decided to put a healthy amount aside for each of their four grandnieces and nephews without letting the children know. They wanted to teach the responsibility that comes with a college education—letting them explore the different avenues of funding, apply for scholarships, and consider student loans—so they could see how it was to do things on their own.
Knowing that the contributions from Richard and Janet would be there when they needed them offered peace of mind to the parents and would be a pleasant surprise for the children when the time comes.
If your family could benefit from a professional facilitator during a difficult financial conversation, reach out to the team at Signature Financial Planning to discuss a family meeting.
