As families get together during the holidays, a number of issues are typically discussed.  One of those issues might be the need for a Family Risk Management Plan.  While typical families deal with the type of risk associated with illness, death, incapacity to a key family figure through the use of insurance; other families are addressing the issue of the members of the older generation who continue to work and live much longer, as well as what the plans of the middle generation might be if they do not have the opportunities created by parents or grandparents retiring from the family business.

Additionally, the divisions of family assets, which arise when divorces occur, are also subject to review and planning, similarly to what might occur with the purchase of insurance.  In the situation of members of the next generation getting ready to marry, a prenuptial plan that is carefully drafted and discussed, may well present a viable asset to the overall family plan.

The family members need to have a desire to achieve an understanding and commitment in order to develop a Family Risk Management Plan and determine how that plan might be implemented.  Doing this may well require annual reviews of the family’s financial assets, as well as the human and inner-personal situations to minimize liability to the entire family.  Each family member needs to understand what their role is expected to be.  The use of such things as insurance policies, estate planning consisting of wills, trusts, health care powers of attorney, and powers of attorney for financial management of assets, needs to be put into place, along with the participation and deployment of an investment policy which is set to coincide with what the family’s desires and long term goals are.  The development of the plan needs to include the members of the family, legal counsel, financial advisors. insurance representatives and someone capable of taking into account the taxes that will affect the family’s financial security.

As the holidays approach and families are getting together, it may well be a time for a discussion as to what multiple generations desire to achieve with the creation of a Family Risk Management Plan.