LO Women Invest: rethinking ways to boost family ties

Our new edition of ‘LO Women Invest’ is dedicated to the topics of love and wealth. In this article, we explore how establishing clear legal, financial, relational, and governance frameworks is essential to fostering peace of mind for couples and families. The full edition of ‘LO Women Invest’ can be downloaded below.

Addressing wealth transfers or monetary arrangements during emotionally testing times adds a burden for any family. Yet many couples and families do not discuss financial planning, inheritance or asset transfer openly, or tend to postpone discussions, meaning they have no provisions in place when they are needed.

This is understandable, since money is often a key source of diverging views. Yet, as uncomfortable as it may seem at first, speaking openly and regularly about money matters creates transparency and trust - among partners as well as across generations.

Acknowledging differences in values, lifestyles and attitudes toward money, as well as sources of vulnerability between partners or across families, helps create fair outcomes for all involved and helps preserves family ties even when these change, or span generations.

Acknowledging differences in values, lifestyles and attitudes toward money, as well as sources of vulnerability between partners or across families, helps create fair outcomes for all involved

Making wealth a source of security

There are different models of civil partnerships, both in legal terms and in financial practice. Marriage, registered partnership or cohabitation are the most common ones in many Western countries. The legal framework chosen with the form of civil partnership provides a first governance building block in case of separation.

For other partnership models, legal frameworks including cohabitation and dissolution agreements are available to provide clarity and legal protection in case of separation. Defining these legal frameworks is a first step to providing clarity among partners on what happens if life takes an unexpected turn.

Read also: Women investors: how should your investment portfolio adapt to life’s milestones and goals?

Establishing clear financial governance

Financial governance adds another layer of clarity. Most couples have a combination of joint and individual bank accounts from which they manage the different parts of their individual and joint assets. Directly held assets may also be broken down as individually owned or under shared ownership. The transparency granted to each other on individual assets can vary depending on whether own property or acquired property is concerned.

Sound financial practice is for both partners to review the family’s overall financial situation at least once a year, typically at the time of filing taxes, if applicable. This is especially pertinent as both spouses will be jointly liable for taxes due. Even if one spouse takes care of the investments or large acquisitions on behalf of the family, the other spouse should be informed and involved, and all major purchases or loans should be documented.

Why does this matter? If one partner is not generally involved in financial decisions, they may struggle to make informed choices in the event of a separation, divorce, or death. The longer one remains uninvolved, the greater the cost emotionally and financially should circumstances change.

When starting a family, most couples determine their respective roles with more or less emphasis on income-generating activities as opposed to non-remunerated family-care activities. A classical role distribution often involves women in a family-care role for a number of years, during which they do not contribute to either social security or pension schemes, which sets them back on their wealth creation path and can sometimes result in financial difficulty in old age in case of separation. This is a trend which is clearly changing, globally.

Agreeing on a fair financial transfer model within the family that assigns value to the household work of the spouse entrusted with this role helps close some of these wealth gaps. Third parties like wealth planners can support couples in finding a financial model that puts both on a fair footing over time.

Successfully transferring family wealth

While strong governance between partners lays the foundation for stability, long-term resilience comes from extending that clarity and foresight to the next generation through thoughtful wealth transfer planning.

Families often think there is no rush to organise one’s estate and succession. As a result, it is not uncommon to see parents making hasty decisions due to unforeseen events. Intergenerational wealth transfer is an emotionally charged subject, as it touches on more than just money – it involves family emotions, identity, values, and legacy. It is not surprising that many families postpone this important conversation; in fact, many families do not discuss inheritance planning and asset transfer at all.

Another misconception is to think that all types of assets can be consolidated under one structure that will reduce the tax burden, protect the assets, and take care of heirs and vulnerable family members – wherever they live. In reality, inheritance planning is a complex process that needs to take into account not only the personal and financial situation of the founding generation but also that of each heir individually.

Inheritance planning needs to take into account not only the personal and financial situation of the founding generation but also that of each heir individually

Regarding family business continuity, parents sometimes assume they understand their children's aspirations, thinking that they may want to follow in their footsteps. These assumptions can lead to conflict due to a lack of communication within the family. Establishing open communication between generations is hence critical.

Read also: Family businesses and wealth: our expert’s advice on transferring successfully to the next generation

Fostering effective communication across generations

Promoting healthy communication within families is essential to maintaining harmony and ensuring continuity. One of the most important steps is to recognise and respect the differences in values, lifestyles, and attitudes towards wealth.

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Education also plays a vital role: helping each generation understand the cultural and generational influences that shape their perspectives can bridge gaps and foster harmony.

Open dialogue is another cornerstone of effective communication. Regular family meetings provide a structured opportunity for updates, discussions, and the expression of concerns. Establishing clear, shared goals – such as long-term family well-being or the preservation of wealth – can unite generations around a common vision. This vision should reflect the values and aspirations of all family members, creating a sense of purpose and direction.

Regular family meetings provide a structured opportunity for updates, discussions, and the expression of concerns

In some cases, involving professional mediators or advisors can be beneficial. They can help navigate sensitive topics, while financial advisors and estate planners offer objective guidance and help bridge generational differences in financial decision-making.

Passing on values: strengthening family identity across generations

Transferring a family's values, vision, and mission to the next generation is essential for preserving its identity and legacy. This process goes beyond financial inheritance – it’s about cultivating a shared sense of purpose and belonging that endures over time.

One powerful way to achieve this is by sharing stories that reflect the family's history, achievements, and challenges. Equally important is the preservation of family traditions, through gatherings, celebrations, and rituals that embody the family's values and reinforce its cohesion.

Mentorship also plays a vital role in this transmission. When older family members actively guide younger ones, they help instil a sense of responsibility and understanding of the family's principles on ethical behaviour, social responsibility, and leadership. The same goes for younger generations mentoring older ones on a variety of issues such as new economies and ways of doing business.

Formalising the family's values and vision in a written document – such as a family charter or mission statement – can provide clarity and continuity. It serves as a reference point for decision-making and helps align future generations with the family's long-term goals.

Formalising the family's values and vision in a written document can provide clarity and continuity

Rethinking ways to boost family ties

Engaging in philanthropic activities or community projects that reflect the family's values is another meaningful way to pass on its ethos. These initiatives not only benefit society but also reinforce a culture of giving and purpose within the family.

Effective succession planning often hinges on several key factors that go beyond wealth itself. In our experience, families that engage in honest conversations about inheritance, values, expectations, roles, and plan early, tend to avoid misunderstandings and conflict. Keeping all family members informed about any changes to the estate plan helps maintain clarity and trust.

Having a well-drafted will and estate plan that clearly outline the distribution of assets and responsibilities also minimises ambiguity. Ensuring that the distribution of assets is perceived as fair by all heirs can prevent feelings of resentment and disputes.

Ultimately, the most powerful form of leadership is by example. When family members demonstrate integrity, empathy, and accountability in their actions, they inspire others to do the same.