Talking To Loved Ones About Estate Plans
Many individuals are hesitant to talk about their estate plans with their family members. Maybe you don’t want your children to know how much money they may inherit when you die. Or perhaps you believe your heirs will alter over time.
If you don’t talk about your estate plans, though, you can end up with arguments and problems when the specifics are exposed.
For example, if distributions aren’t equal after your death, siblings may fight amongst each another, even if one kid is much less financially secure than the others. If you remarry, your children from your previous marriage may be resentful of assets you leave to your second husband.
You won’t be able to express your feelings and preferences about how your assets should be distributed at that time.
Discussing your estate plan lets you enlighten your heirs about how your inheritance will be distributed and why you chose to handle things the way you did. You may go into specifics, telling heirs how each item will be allocated, or offer a broad outline of your estate plan. Explain why you chose a certain heir as executor.
Even if you tell your heirs about your intentions, it may be a good idea to include in your estate plan a handwritten letter with details about benefits, particular desires, who should get personal items, burial and funeral choices, and the location of vital documents.
At the very least, provide the following information:
- Income tax returns.
- Life insurance policies.
- Other insurance policies.
- Investment details.
- A list of household contents.
- Outstanding loan documentation.
- Automobile titles.
- Important warranties and receipts.
- Bank account information.
- Credit card details.
- Information about your home.
This letter will assist your heirs in identifying all assets and advantages, as well as preventing speculation about your preferences. While preparing the letter, you will be forced to arrange your files and ensure that all key papers are conveniently accessible. Review the letter at least once a year since the material is likely to change.
Your Children’s Estate Plans
If you have a large estate to leave to your adult children, they will undoubtedly need their estate plans completed as well. Consider the following suggestions to motivate them to plan:
Explain why estate planning is essential. The goal is to raise awareness about the need for estate planning without interfering with their decision-making process. Remember to remind your children to evaluate their estate plans when they go through significant life events, such as marriage, divorce, or the birth of a baby.
Coordinate estate planning across generations. If you have a significant estate, you may wish to combine your planning efforts with those of your children. For example, if your children have large estates, they may prefer that their legacy goes to your grandchildren. Taxes can be reduced with a concerted effort.
Encourage your children to get significant estate planning documents in place, such as a will, an effective healthcare directive (“living will”), or a power of attorney.
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