The holiday season is here, which means you will probably be spending some extra time with your family. The holidays are a great time to get caught up with everyone’s lives, reminisce on fond memories and, yes, talk about your estate plan.
First, let’s discuss why it is a good idea to talk with your adult children about the plans you have for your estate. As this informative article explains, it’s important to discuss inheritances with your heirs for a number of reasons.
One of the biggest reasons is because it can help reduce the stress your children face when you pass away and it is time to probate your will or otherwise distribute your estate. This can be a very difficult time for children -- even adult children -- so giving them information in advance is always helpful.
Additionally, when adult children know how your estate plan is set up it is more likely that your assets will be distributed seamlessly. The article pointed out that 70 percent of transfers from one generation to another fail, and a lot of that has to do with heirs being unprepared.
Finally, having a discussion about your estate plan can help reduce conflict down the road. Tempers tend to flare when heirs are surprised to learn that they will not be inheriting what they thought, especially during an emotional time like after a death.
The conversation should also include who is getting what personal property, such as jewelry, art or collectibles. Having a conversation with each adult child ahead of time can help set expectations and reduce the likelihood of the will being contested or disputes arising over property.
Now, for the “how.” If you are like most people, talking about money may make you feel uncomfortable. Even so, it’s important to have the conversation anyway. It’s best to call a family meeting with all adult children present where you can discuss your plans and how your children will be affected.
If you have a child who is in a unique financial situation or is being treated differently under the estate plan than the others, then you may want to have a conversation with him or her separately.
You may also want to consider having your estate planning lawyer at the meeting to help field questions and explain how trusts and other estate planning tools work.