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.