Putting 'family' into financial planning


A couple that decides to form a long-term relationship does more than create a legal and spiritual bond.

They also combine their strengths and weaknesses to create a team – one that has dreams, makes plans and strives to reach personal and financial goals. With the addition of children, the team becomes a family.

At the same time, the personal and financial goals probably shift and become more complex.

Fast-forward to becoming grandparents and the couple's priorities may evolve even more, with an increasing focus on legacy.

Finances play a key role throughout the growth of a family.

From initial investments like a KiwiSaver, home purchase, tertiary savings, retirement funds, investments, insurance premiums, charitable giving and, of course, determining long-term goals.

Agreement on goals and the best way to achieve them, and communication throughout the process is essential to success.

It is very helpful for the entire family to understand those goals and what it takes to reach them; this helps reduce disagreement on finances and increases excitement and engagement by family members throughout their lives.

It also allows children to become responsible, financially savvy adults.

Here are some key areas that we believe families should communicate frequently on.

The life-stage at which this should occur i.e., for instance, how old should children be before you bring them into financial discussions is up to each family.

The overall objective would be to ensure that all family members understand the financial goals – therefore the reasons for the related actions – of the family.

Financial Planning

It is wise to include adult children in a discussion about your financial plan, especially if you are at or nearing retirement age.

Unfortunately, life throws curve balls at most of us and it is very helpful if your adult children are familiar with your financial situation, including your existing financial plan, insurance situation, charitable giving desires and your estate plan.

A personal introduction to your key advisers – financial planner, investment management adviser and lawyer – is especially helpful.

Should you and/or your spouse suddenly become incapacitated, it is important for your children to have some knowledge of your financial situation and contact information (with a relationship already established if possible).

This will ease the difficult process of navigating concern, care and finances for your spouse and/or children while you recover.

Charitable Giving Plan

Even in the wake of proposed changes to charitable giving rules resulting from the taxation bill, we find clients are firmly holding on to their charitable giving goals. It is vital that your charitable giving preferences are known by your heirs and are documented in your financial plan, estate plan and your will.

There is no better way to ensure that your heirs are engaged and committed to your charitable goals than by involving them in conversations about the reasons behind your preferences and in activities that surround your supported organisations or causes.

Estate Plan

Among the most difficult of conversations to initiate and hold is the one that surrounds an estate plan. While most of us prefer not to think about dying, it is a fact of life and not planning for the inevitability can wreak havoc on your loved ones.

An estate plan should involve you and your spouse (if applicable), your financial and legal adviser. But estate plans are not "one and done" projects; instead, they should be revisited when major life changes occur.

When marriages occur or dissolve, children are added, parties to the estate pass away or become incapacitated or significant wealth is added that may change the approach to distribution – these are just some of the things that must be considered and kept current.


What kind of legacy do you want to leave for future generations? Whatever it may be, it doesn't start with your passing – it starts now.

Your personal passions, charitable wishes, desires for the future of your children and grandchildren – all those things must be considered, planned for, discussed with your family and put in writing so that what you build in life continues for generations after you're gone.

The heart and soul of your legacy building is yours, but the execution of it over time involves the expertise of legal and financial advisers.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961.