How to incorporate family money into your life


By Sam Instone - June 08, 2022

Along with increased opportunities...

There's something else that comes along with receiving family wealth.

Uncertainty.

To sensibly integrate new family assets into your life…

Say, from a family business sale, or a family trust,

You’ll need to know any expectations that come along with them, as well as any responsibilities.

Only then can you make informed choices about any next steps.

Start with ‘why’

Asking questions from the outset might seem awkward at first, but done the right way, it also shows you regard being the recipient of new wealth, seriously.

Then there’s the matter of whom to ask.

My advice?

Start with the source of the assets.

For distributions from a family business, this will likely be a board of directors with input from a family council or key family shareholders.

If you are the beneficiary of a trust, you'll want to set up time to meet with the trustee.

For more direct, less structured monetary gifts, a conversation with the giver, likely your parents or grandparents, is best.

What you ask is up to you.

What information do you need to know?

What do you already know?

Be mindful that the person you ask may not be able (or ready) to share answers to any and all questions, and you will need to respect that decision.

The important thing is to learn about any expectations that come with receiving these assets, so you can plan for how they will impact your financial life.

Here are 5 questions you might want to ask:

  1. Are there specific intentions I should honour?
  2. Are there hopes or expectations for how this money will affect my life?
  3. Am I free to use these assets in whatever way I choose?
  4. Could any future money be rescinded pending my decisions in question 3?
  5. Is there an adviser who can help me evaluate my options?

To ensure these conversations go well, give everyone involved plenty of time to review your questions in advance and be patient.

Money is an uncomfortable, almost taboo, subject for many people, and it may take a while for meaningful conversations to happen. You might not get all the answers right away.

Focus on the questions that truly matter to your life at present.

Perhaps you're about to purchase a new property, or treat yourself to the boat you always wanted, and want to move forward.

You might therefore want to check if this gift will happen annually, and for how many years.

Don’t place too many demands on day one.

These can be sensitive matters, so consider what you share (and don’t share) with others.

After all, you don’t want to damage any future conversations.

Consider the ways you can use family money

Once you know more, you can begin to decide how to put these assets to use.

Will the annual gift pay your rent or mortgage?

Or tuition for your children?

Will it enable you to take a career break and travel?

Are you hoping to buy a property or start a business?

Do you want to add to your investment portfolio?

The options will be highly individual.

But once you know any intent behind the gifts and how regular they are likely to be, you can think strategically about both the short and long term.

The opportunities that come with family money can be life changing.

A true gift.

If you want to feel confident you are making wise choices about how to put family money to use, don’t hesitate to get in touch.

Save and invest for a better life, book a call - SAM