Avoiding conversations about what you want to have happen after you die or if you become incapacitated can create controversy, sometimes leading to lifelong estrangements between family members. This is just one reason to speak with children, reports a recent article from CNBC, “Most retirees don’t tell adult children about their inheritance, research shows. What advisors recommend sharing, when.”
This reluctance to divulge details about estate plans is common. Wealthy parents often don’t want to give their children a reason not to build careers or their own wealth. Some families don’t talk about money. However, avoiding these conversations usually leads to larger problems later.
Estate planning attorneys typically recommend discussing estate plans with adult children, even if only a broad overview is provided. One sticky point occurs if assets are not being divided equally. If the family isn’t comfortable talking about specific amounts, a conversation about the structure of the estate plan may be a starting point.
Remember, estate plans are not just for wealthy families. It should include a will that directs how you want your assets distributed, a power of attorney for financial decisions and a living will that specifies your end-of-life healthcare wishes.
There are situations where it’s not good to share plans with an adult child. If the adult child is still dependent upon their parents for financial support or has a drug problem, talk with your estate planning attorney. They may recommend using trusts to protect assets, while putting guardrails on future inheritances.
In cases of unequal inheritances, it may be wise for parents to have conversations with their adult children to explain the rationale for their decisions. By giving context and answering questions while you’re alive, even unwelcome news can at least be discussed, and the impact, if unexpected, may be softened.
Another reason to avoid discussing exact numbers is that wealth changes. The amount of money saved before retirement may be largely spent at the time of death. Health care costs or a decade of travel could diminish the parent’s wealth.
While having these discussions, parents should also share key estate-planning professionals with their children, including an estate-planning attorney, a financial advisor and a CPA. Be sure the childrenknow where to find estate planning and financial documents.
Legacy One Law Firm, APLC is an estate planning and probate administration law firm in Los Angeles, California, serving families throughout the State. Schedule a quick and easy consultation with our estate planning attorney, Sedric E. Collins, Esq., or call 323-900-5450.
