Talking with loved ones about estate planning and inheritance can be challenging, especially as it centers around two taboo topics \u2014 money and death. But talking with your adult children about their inheritance can provide significant advantages for you and them. It can help your heirs better prepare for the future and give you a chance to explain the reasoning behind your decisions.<\/p>\n\n\n\n
Here\u2019s a look at the importance of discussing your estate plan with your kids and how to start that conversation when you\u2019re ready to have it.<\/p>\n\n\n\n
Your children might have some idea of your assets, but they likely won\u2019t realize the full picture unless you tell them. If you\u2019re comfortable doing so, walk your kids through your estate in detail, discussing exactly what they will inherit. If dealing with exact figures is too much, even a general idea of the size of your estate can help inform your kids\u2019 financial choices and manage expectations about what they may (or may not) inherit.<\/p>\n\n\n\n
Discussing your estate is also an opportunity to talk with your kids about your family legacy. Share the decisions you made throughout your working years to build and preserve wealth. Discuss charitable giving priorities and values surrounding how to handle money. You may also wish to pass along financial wisdom, such as financial mistakes you\u2019ve learned from over your lifetime. This discussion could even open the door to financial topics your kids may not have felt comfortable discussing with you before.<\/p>\n\n\n\n
Finally, be sure your children know where you store important documents and how to access them. Similarly, provide them with the contact information for important players in your estate plan, such as your financial advisor, estate attorney, and whoever has power of attorney.<\/p>\n\n\n\n
Depending on how many kids you have, the ages of each one, and other life factors, the inheritance each child receives may not be equal. Maybe you\u2019ve decided to leave more to one child due to a disability or health condition, or maybe you\u2019re leaving most of your money to a favorite charity, leaving less for your kids overall. Going over these decisions now can head off hard feelings and confusion about how you want your money managed after you die.<\/p>\n\n\n\n
If you\u2019d like one of your kids to take on an important role such as executor or power of attorney, explain their responsibilities ahead of time. You may discover they don\u2019t feel up to the task and that you need to choose another person. Whether you\u2019ve chosen someone else in the family or even a professional executor, use this discussion to explain why.<\/p>\n\n\n\n
There\u2019s no perfect time or place to bring up an emotional topic like estate planning, but some situations may be better than others. While it may be tempting to open a dialogue around the holidays when everyone is home, family get-togethers can be stressful and chaotic. Instead, find a quieter time of year, and pick a comfortable environment with positive associations.<\/p>\n\n\n\n
If you\u2019re unsure of how to begin, your financial advisor can help you facilitate the discussion. They can answer your children\u2019s questions and explain their responsibilities in the execution of your estate.<\/p>\n\n\n\n
It\u2019s all right if the discussion doesn\u2019t go exactly as planned. You\u2019re opening a dialogue about your estate plan with your kids, and it may take more than one conversation to get on the same page. But working through any issues now reduces the risk that they\u2019ll develop into conflict later and increases the chances your wishes will be carried out as planned.<\/p>\n\n\n\n
At the end of the day, \u201cestate planning is critical to every family,\u201d Preston Smith, one of our wealth management advisors had to say. \u201cIf you fail to plan, you plan to fail.\u201d No one wants to discuss what happens when we pass, but being able to provide for your family, future generations, and help make the process easier for your loved ones is essential.<\/p>\n\n\n\n
Sources:<\/p>\n\n\n\n
https:\/\/parsecfinancial.com\/how-to-talk-to-your-children-about-your-estate\/#:~:text=Provide%20your%20adult%20children%20with,your%20financial%20and%20estate%20 advisors<\/a>.<\/p>\n\n\n\n https:\/\/invested.mdm.ca\/md-articles\/how-to-talk-to-your-kids-about-their-inheritance<\/a><\/p>\n\n\n\n