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Discussing Your Estate Plan & Goals With Your Family

Discussing Your Estate Plan & Goals With Your Family Image

Preparing for a successful transfer of wealth to your loved ones begins with a comprehensive estate plan. However, many of us often overlook the crucial part of communicating our estate plan to family and heirs. Even with a thorough and up-to-date estate plan, your family may experience emotional or financial turmoil despite your best efforts. To properly manage the expectations of loved ones and provide for a smooth transition of wealth, have conversations and share information about what is to come. Whether you are a modest or a high net worth individual, preparing the next generation for handling wealth is a responsibility to take on while you are alive.

There are various reasons why most benefactors disclose little or no information about their wealth to their children. Some people may have been taught not to talk about money or worry their inheritors will become entitled and lazy. Others may worry about opportunistic friends hanging around to siphon inheritance from an unsavvy heir, and sadly some worry about the future funding of addictive, self-destructive habits.

The truth is many inheritors do not have a clue about the value of money and how to handle it, giving credence to the adage often attributed to Andrew Carnegie, "Shirtsleeves to shirtsleeves in three generations." Reuters quotes a grim statistic that "It takes the average recipient of an inheritance nineteen days until they buy a new car." Talking early on and often about family wealth and inheritance to your children and grandchildren will help build generational wealth through learned financial literacy.

To avoid the potential for family discord, emotional wounds, and legal woes, call your family together and approach the topic in a general way at first. The goal is to create a comfortable, calm environment that will eventually become more structured as you delve into details. Some may find it beneficial to have their estate planning attorney attend the meeting. Begin with an overview of your estate planning. Speak to your desires to avoid the common pitfalls of inheritance and address any immediate questions they may have.

Do not overwhelm your family with too much too quickly. Some of the information you provide may take time for them to digest. It is useful to encourage them to think about further questions to discuss at a second meeting. Be prepared to have to defend your decision-making process gently. Remember, you have been thinking this through for some time, and your inheritors are just getting the information. Sometimes unhelpful words may be exchanged but realize it as first flush responses. A well-crafted estate plan should address your long-term family goals and aspirations, though some family members may at first react poorly to your decisions if they do not perceive them as "fair."

Begin with the location of any estate planning documents such as your will, powers of attorney, advance directives, insurance policies, lists of investments, properties, and relevant accounts. Full disclosure of assets and planning documents go a long way to dispelling rumors or innuendo about "phantom" assets that can create family strife. Ask family members to express their hopes or concerns and ask as many questions as needed. Please pay close attention to those family members named to represent you formally, such as the executor or power of attorney, to ensure they are both capable and comfortable performing these duties.

Additional meetings allow you to answer specific inheritor questions and more fully explain your decisions. Having clarity in communication can help avoid future family infighting and perhaps address existing family rifts while you are still alive to speak for yourself. Managing your heirs' expectations can bring out surprising insights about personalities and family hierarchy. You may want to adjust your estate planning based on the information you garner from these meetings. Should you make substantive changes, advise your family of these changes.

It is preferable to communicate your estate plan well in advance of the reading of your will. Smoothing ruffled feathers while you are alive can preclude an all-out legal war that may decimate assets and destroy your family after you are gone. Presentation of and discussions about your estate planning documents provides a practical financial roadmap of assets and your dispersion expectations. Make open and honest conversation with heirs part of your estate planning.

Jason A. Penrod is only the 20th attorney to be Board Certified as an Elder Law Expert by the Florida Bar and the National Elder Law Foundation.  He is the founder of Family Elder Law (www.familyelderlaw.com) which has offices in Lakeland, Lake Wales, and Sebring, Florida.

  • National Academy of Elder Law Attorneys - Florida Family Elder Law

  • Life Care Planning Law Firms Association

  • Florida Family Elder Law Office

  • Family Elder Law Lakeland Florida Area Chamber of Commerce Member

  • Family Elder Law Lake Wales Florida Area Chamber of Commerce Council Member

  • Family Elder Law Greater Sebring Florida Chamber Of Commerce Member

  • Family Elder Law Florida Bar Certified

  • Family Elder Law Florida Elder Counsel Member

  • Life Care Planning Law Firms Association

  • Life Care Planning Law Firms Association

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