In many families, there is an uncomfortable silence when the subjects of death and money come up. According to Eileen and Jon Gallo, authors of Silver Spoon Kids: How Successful Parents Raise Responsible Children (McGraw-Hill, 2001), most adult children have no idea of their parents’ net worth, let alone the details of their estate plan. All too often, “when kids work up the courage to ask their parents for specifics, they often get slapped down.”

Some parents use their money as a means of controlling their children. They change their estate plan as a way of rewarding and punishing behavior. This article is not for those parents.

What should you tell your children about your estate plan? They don’t need to know all the details. In most instances it is unwise to provide the kids with actual copies of your current documents. The tax law will change, your circumstances may change, the children’s circumstances will change and you may make changes to the plan. Distributing copies gives a false sense of the permanence of the current disposition and raises expectations that may not be realized.

Nevertheless, you should tell your kids that you have addressed your plan, have made wills, powers of attorney and so forth. Assure them that you have considered the tax ramifications with qualified counsel and that you have made provisions for them to be effective after both parents are deceased (or whatever disposition you have in fact made.)

Talk to your kids about your furniture, jewelry, collections, heirlooms. Try to work out who gets what now. In my experience, the most bitter arguments come over the division of these items of personal property. Many times these pieces have little monetary value, but they are loaded with sentiment. Give your children the gift of resolving these issues while you are alive. Remember – everyone says their children won’t argue. Your children have argued before, and they will again. Don’t be in denial.

You don’t have to give your kids details about your finances, such as this month’s balance in your checking account and a list of holdings in your brokerage account. But you should prepare a list of your assets, their approximate values, and the contact persons for each holding. There should be a listing of professional advisors and how to reach them, and the location of stock certificates, life insurance policies, deeds, and evidences of debts. You can give the list to the kids, or you can just tell them where it can be found when the time comes. Update it from time to time.

The post Talking About Estate Planning – Part I of 2 appeared first on the Spencer Law Firm blog, https://www.mspencerlawfirm.com/blog/.

Give your family the gift of telling them what you have planned for them.

Decide who will be your executors, agents under your power of attorney and surrogate for health care decisions under a medical directive. Let the family know who is going to hold these positions. Make sure the persons you name are willing to serve.

Most parents want their children to be self-supporting. They may help them financially from time to time, but they don’t expect to be supporting their children well into adulthood. If the family has wealth, it is only fair to the children to discuss the estate plan so that they can understand what they’re going to receive, when they will receive it, and plan their lives accordingly.

If you are planning to treat your children differently, it is very important that you discus the plan with them. There can be good reasons to leave unequal inheritances to children, but they shouldn’t find out about it after both parents are dead. They should hear the explanation from the parents in a family meeting.

If you wish that your parents would share their plans with you, here is some help: Read How to Talk to Your Senior Parents About Really Important Things (Jossey-Bass 2001), by Theresa Foy DiGeronimo. It has loads of practical suggestions on how to talk about everything from driving safety, alternative living arrangements, scams that target the elderly, and unwise romances.

Steve Leimberg, in Estate Planning Newsletter # 795 (March 3, 2005) a summarizes an article by the Gallos (Gallo Wines) and gives suggestions for how to approach estate planning with your parents. Try a discussion:

• of friends or friends’ parents who had positive experiences as the result of planning or negative experiences because of a failure to plan;
• about the child’s own experience in planning his or his estate;
• of recent or potential changes in the estate and gift tax laws; or
• about the need for health care powers of attorney (or similar types of advance directives) in the event of illness.

Some other ways to start a conversation on the topic of estate planning are to:

• discuss the child’s own wishes (and plans if any) if he or he is disabled;
• provide family members with a list of trusted advisors and their phone and e-mail addresses;
• let family members know where you’ve put a list of your assets and the location of your safe deposit boxes.

Parents often view their children’s efforts to ask such questions as attempts to take control. Often the parent generation lived through World War II and the Depression and are afraid of losing control. They also think they should not need or ask for help. Some parents may not have their financial information organized, or some may not have the financial resources they have led the children to believe they had.

If parents decide not to share information about their estates and their estate plan; the decision, of course, must be honored. However, be aware that non-disclosure and no communication create uncertainty and tension. Relationships that are already strained can deteriorate further under the emotional pressures of losing a parent and feeling insecure and in the dark about the estate.

Give your family the gift of telling them what you have planned for them.

The post Talking About Estate Planning – Part 2 of 2 appeared first on the Spencer Law Firm blog, https://www.mspencerlawfirm.com/blog/.

Estate planning aims at the transfer of wealth from one generation to another in a way which minimizes taxes and maximizes economic gain. It usually involves parents making gifts to their children, grandchildren, or charities. The problem is that while many clients spend hours with attorneys, accountants, and financial advisors crafting an estate plan, they spend no time with their intended beneficiaries explaining what they have done and why. After mom and dad are gone, the family acrimony begins – brother sues brother and sisters stop talking to one another for years.

Since your typical (dysfunctional) family has trouble communicating about day-to-day activities such as what to have for dinner, perhaps it is no surprise that the typical family cannot and does not communicate about dying, property division, and settling estates. Nevertheless, communicating the plan and addressing the issues before death is the best gift you can give your beneficiaries.

It is not bad manners to talk about the estate plan, and it will not make matters worse. What makes matters worse is leaving the children to fight it out after mom and dad are both gone. If you are afraid to tell your kids what your estate plan is, you are leaving them a legacy of acrimony. Talking about the plan and discussing it can ensure that hidden agendas are brought out into the open, get the most buy-in from the parties, and get the best protection against the plan being contested.

A good estate planning attorney can help with this process if the clients are willing. The attorney does not do family therapy, but rather aims to resolve disputes while attempting to preserve family relationships. It depends on opening lines of communication and coming up with solutions.

Open communication is also good for planning and discussing long-term care issues with parents, to determine how siblings can share equitably the responsibility of helping aging parents, and how to deal with caregivers and medical personnel.

Much is at risk in estate planning, and the most important is not estate and inheritance taxes. The most important factors are the beneficiaries, their lives and their relationships – in other words, the family.

The post Discussing ‘The Estate Plan’ with Beneficiaries appeared first on the Spencer Law Firm blog, https://www.mspencerlawfirm.com/blog/.