CAN WE TALK?
A smart and simple way to address the details in estate planning
Is there any better way to spend the holidays than with family? For some, it may be the only time of the year when you see each other face to face. At these rare gatherings, you are presented with an opportunity to have a very important conversation – a conversation about estate planning. I know, talking about money and death might put a damper on the family fun, but if handled properly it can be an open discussion that provides comfort to your loved ones down the road.
While it can be tough to start discussing your estate plans, it’s a conversation that should not be avoided. For the conversation to be effective, you should refrain from talking about specific dollar amounts. Instead you should talk to loved ones about the role they play in your plans, the process, and why the estate assets are being distributed in a certain way. For example, too often families don’t discuss why money is left in trust for their heir’s benefit. It may be for certain tax benefits, asset protection, or investment management reasons. If not explained properly beforehand, heirs can come to misguided conclusions—”Dad never thought I could handle money” or “Grandma didn’t care for my wife” or “Mom always liked you best.” Don’t leave them wondering – by developing and discussing your estate plans, you can help eliminate anxiety and tension among loved ones and avoid potential legal fees in the future.
HOW TO HAVE THE CONVERSATION
Step 1: Break the ice by discussing clerical matters. Tell your family where important documents are located, the contact information for your key advisors (financial advisors, accountants, and attorneys), and what immediate steps need to be taken at your passing.
Step 2: Summarize your view of the family’s values, purpose and legacy. Talking about your family’s values is much easier than talking about money. Explain that your focus is on responsibly transferring assets to the next generation while protecting your family’s values and avoiding conflict. Explain that relationships matter more than money or things. That is the true goal of your estate plans.
Step 3: Explain their role in your plans. It is likely that one or more children will become directly responsible for your affairs while you’re still alive. It’s important that they know your wishes and know what their responsibilities entail. If, for example, you’ve chosen your son as your personal representative, discuss with him the scope of his duties and how he interacts with your trustee after your passing.
Step 4: Agree on another time to discuss a specific topic in greater detail. The scope of your first conversation should be general and big picture. Ask to reconvene with them at some later date, either individually or as a family, to discuss more specific aspects of your estate plans. For example, set up a time to discuss the distribution of your personal property. Are there any family heirlooms that hold sentimental value to a particular child? What is the fairest way to divide up your household goods?
Step 5: Conclude the conversation by reminding your adult children to begin drafting their own estate plans. Sadly, one of your children could predecease you. What would they like to see happen to their share of your inheritance if the unthinkable happened?
Ultimately, no one knows your family better than you, which makes you the best judge of what should be discussed with each family member. It’s been my experience that the more your family knows about why your estate plans are designed a certain way, the better. The more advance planning you do with your family involved, the easier the transition will be for them in the future.
If you need help discussing your estate plans with your heirs, you should seek assistance from an expert in estate planning. At Legacy Trust, we have advisors available to help. Whether you need help or not getting the conversation started, we encourage you to talk with your loved ones – it can make the holidays even more meaningful to the people you cherish most in life.
Click the link below to listen to a podcast featuring Kelly DeRidder further discussing the topic of estate planning: