Creation of a Family Risk Management Policy Statement

risk management policyA solid family risk management policy contains the purpose, principle and procedure for implementation. The purpose of a family risk management policy may be to reduce the risk for family members, both individually and as a whole. Adherence to the policy would go far to protect the family’s human and financial assets and minimize potential liability. The principle of the policy may be to make clear that the responsibility is to identify the areas of high risk and to do whatever possible to mitigate that risk. The procedure of the policy may make it clear that each family member is expected to:

  • Achieve financial literacy with regard to his or her own wealth as well as the wealth of the family enterprise.
  • Draft and have both parties sign a pre-nuptial agreement.
  • Contact their insurance providers annually to review their insurance coverage to ensure that they are current and adequate.
  • Have in place basic estate planning documents: will, revocable trust, health care proxy, power of attorney for financial assets.
  • Participate in the development of an investment policy that is aligned with the family’s shared values.
  • Protect the family’s reputation by learning how each individual’s behavior, both positive and negative, can impact the family’s reputation.

A family risk management policy statement is dynamic. It should be reviewed and adjusted as the risks that families face evolve and change.

  • Life insurance is a solution and mitigates risk Pay particular attention to gift splitting and use of both exemptions

Summary: remember why insurance is an effective solution

  • Long term care insurance provides a system of care that accelerates care and makes the conversation easier

Long term care insurance preserves dignity, protects inheritances and allows for family harmony by relieving the caregiver spouse and children
Long term care insurance protects the income and assets in a second marriage

  • Life insurance can be implemented to utilize the exemption yet take the pressure off current gifting of assets into the hands of the next generation

Life insurance and gifting can be effective to utilize otherwise wasted spousal exemptions- look at Non US spouses, same sex marriages, non traditional relationships
Life insurance covers the traditional risks of liquidity and equalization.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at To download Annino’s FREE eBook, Estate Planning 101 visit,

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