Share Your Estate Plan With Your Adult Children
While you can’t control all the decisions of your heirs after you die, leaving them with little or no guidance is bound to lead to problems. Your will and trusts might even be very clear on how your estate is to be distributed, but they can’t clearly communicate your vision or goals. In many families, this results in a breakdown in communication, trust and financial literacy.
A good estate plan, designed by an estate attorney, is likely to contain all the elements needed to prepare your assets for transition to your heirs. The next crucial step is to have that tough discussion with your children.
Why Parents Avoid the Estate Planning Topic
For many families, money and issues surrounding their wealth are taboo topics. In some cases, parents feel their children aren’t mature enough to discuss financial issues. Other parents are reluctant to disclose the size or makeup of their estate, or their intentions for its distribution, for fear of instilling a sense of entitlement or encouraging their children to change their own future plans. Regardless of whether those concerns might be well-founded, without a thoughtful and well-planned discussion with heirs, they are more likely to become a self-fulfilling prophecy.
Getting the Conversation Started
Leaving a legacy is as much about transferring family values as it is distributing assets. The only way to ensure your heirs live in harmony with each other and with your vision is to have conversations with your children early and often. At first, it may be uncomfortable for everyone involved, but once your children understand the importance of their responsibilities in managing your legacy, it becomes a family affair, which can get everyone on board.
1. Decide What to Share
At some point, your heirs should have a complete understanding of your plan, including how much they can expect to inherit. Depending on the age or maturity of your heirs, you may want to parcel out the information, starting with what happens to your estate when you die. It’s not all about money. Most importantly, you want to share the principles that guided you in preparing your estate plan. Having conversations about family values and beliefs about money is important for laying the foundation. The financial details can wait until you get the sense they can see beyond the money. Share how important it is to you that it is a smooth transition.
2. Pick the Right Time
The next time your children are together for a family gathering would be the best time to start the conversation. If it is too difficult to schedule a family gathering, you can have conversations when you happen to be together. You don’t have to have the entire conversation at once. Some parents are more comfortable having more casual one-on-one conversations with their children, while others prefer a more formal group setting. It could be a combination of both, especially in situations where you might be treating your kids differently. (For related reading, see: Thanksgiving Is a Good Time to Talk Turkey About Estate Planning.)
3. Get Their Feedback
As you unveil your plan and your vision, check with your children about how they feel about it. Ask for their input. It’s important to make them feel they are active participants. You will also be able to uncover any concerns or misapprehension of your beneficiaries that should be addressed now so they don’t fester and become major problems later.
4. Review Documents
If you plan on naming one or more of your children as executors of your estate, it is important to thoroughly review all pertinent documents, including wills, trusts, powers of attorney and medical directives. Discussing these documents will help to further convey your wishes as to how you want things to happen.
You should provide your children with the name and number of your estate attorney and any services that need to be contacted upon your death or if you become incapacitated. They should also know the location of passwords to financial accounts.
It’s not easy to talk to your family about your death. However, the alternative—leaving them in the dark—almost always turns out badly. Many families enlist the help of their estate attorney or financial advisor to facilitate the discussion and ensure both the tactical and emotional components of estate transfer are given equal attention.
(For more from this author, see: When a Revocable Trust Makes Sense.)
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