Often, one of the hardest decisions people make in the estate planning process is how much (and when) to tell their children or other heirs about their plans. Many people are very hesitant to reveal the details of their family’s expected inheritances. Many parents say they fear that if their children find out they can expect a substantial legacy in the future, they’ll be less likely to work hard and save in the present.
Another worry is that revealing an estate plan could lead to family squabbling and resentment. This is especially true if you plan to leave unequal inheritances to family members. Many families will simply avoid talking about the subject in order to keep peace. If there’s a blended family with children from a prior marriage, things can get even more complicated.
But while it can be difficult, there are also some very good reasons for having a detailed talk with your family about your estate plan. For one thing, if there’s a chance of family squabbling and bitterness, it can be better to tell everyone what to expect now, while you are still alive and have a chance to explain your motives and smooth things over. You could explain, for instance, why you’re leaving more assets to a child with a large family than to a child who is single, or why you’re leaving money to a charity that has always been important to you.
Another thing to consider is that, if someone dies suddenly, the family is often left very confused about finances. They don’t know what assets there are, or where they’re located, and searching for them can be extra stressful when the family is already suffering the grief of losing a loved one. If you discuss your assets and your plan now, so that everyone knows what to expect, it can make things much easier after you pass away.
Many parents who talk about their plans with their children are surprised to discover that their children sometimes have good ideas. If a family owns a vacation home, for instance, the parents might have one thought about what to do with it, but the children might come up with a plan that better protects the home and better suits their future needs.
Talking with your children also allows you to coordinate your estate plan with your children’s own estate plans. You might discover, for instance, that the whole family can save taxes if you give more assets directly to your grandchildren, or create trusts for your children instead of leaving assets to them outright.
If you are concerned about these issues, it’s a good idea to discuss them with your attorney.
I finally decided to jump into the blogosphere. I’ve had my share of money related experiences, and helped a lot of friends, family and co-workers with their financial situations. I created Money Wise Advisors http://www.moneywiseadvisors.com/ as an answer for the people who wanted a more intense money coaching experience. This has been rewarding to start my own business and help people make positive changes in their lives.
I’ll start with a little of my background. My mom was a stay-at-home mom who showed me how to balance a checkbook, helped me get my first credit card and shared stories of success and lessons learned. Both my mom and dad always shared with me that the most important thing you can do to get ahead is to spend less than you make. I was brought up in a very frugal, sensible household where we ate casseroles, sewed our own clothes, and spent time with friends and family more than going out to restaurants or other entertainment venues.
Along with being frugal, there was a time to spend for the right reasons. My parents, thank goodness, enjoyed to travel. We took Sunday drives to nearby towns, camped in our truck with a camper shell, or later in our small trailer. We visited family out of town on weekends. Even better, we flew to British Columbia and Hawaii. We enjoyed our family vacations, learned a lot about the places we visited, and shared memories through photos and stories.
Sure, it was a simpler life just a few years ago. My goal is to break down our current circumstances into easier controlled decisions on how to live well and save and invest for the future. Are you telling your money what to do each month? I’m a money coach, and I’ll say the first step is to pay attention to where your money currently goes.