While many may recognize that drafting a will is an essential part of their estate plan, most don’t realize that it is an instrument for communicating your intentions. Although it functions as a statement of your estate wishes, it won’t help your children understand why you made those decisions.
Talking with your family about your estate plan can be an uncomfortable topic. However, putting off these conversations can leave your end-of-life decisions to chance. A lack of clear estate directions can create stress and conflict for your family. Discussing your estate plan will help your family understand your desires for your future.
What Is Estate Planning?
Estate planning is a collection of legal documents that outlines what you would like to do with your estate upon your death or if you are incapacitated and unable to handle things by yourself.
In addition to determining where your property will go, an estate plan can also help:
- Make decisions about your young children and their property
- Minimize income, gift, and estate taxes
- Avoid probate
- Plan your health care during your life
- Make decisions about What happens to your body after death
In contrast to popular beliefs, estate planning isn’t only for the wealthy. Whether you have a little or a lot, we all have one thing in common: we can only take what we can fill in our casket – and even that’s destined to rot. Estate planning ensures that your assets are transferred as you wish and that there’s someone in place who can help you communicate your healthcare directives.
What Your Children Should Know
Where Are Your Financial Documents Located?
You can save your family time and energy by having all your financial documents in one central location. Ensure that your family can easily find necessary documents like health care directives, insurance policies, investment statements, and bank account statements.
When considering a location to store your documents, choose a location that is:
- Easily Accessible
- Safe and Secure
- Waterproof
- Organized and Uncluttered
One way to secure your documents is by holding them in a bank-safe deposit box or an at-home safe. It is important to remember that not all of your documents are physical and that many of your papers will be online. To help your loved ones keep track of all your online documents, make an ongoing list of all your accounts, logins, and passwords.
Whether it’s a key to the safe or a hidden box of your documents, ensure that the right people know where to access your documents. The goal of educating your family isn’t to share your financial picture, but to give your family the place to go to sort things out quickly in the event of incapacitation or premature death.
What Can Your Children Expect When They See Your Will?
One of the most challenging parts of creating your estate plan is the distribution of your belongings. To prevent conflict in the future, consider sharing the details of your will and ensure that your family knows where to find a copy. If you don’t have a will, have one drafted.
Be transparent about how you have decided to allocate your possessions and why your think this is the best choice. For example, if you are not dividing your assets equally, let your children know and explain the reason behind your decision.
What Role Do Your Children Have in Managing Your Estate?
Will your children be expected to run the family business or maintain your rental properties? Let your children understand what they are expected to do in advance so they can perform their roles according to your expectations.
Here are some of the essential roles you will need to allocate to your children:
Trustee
A trustee is a person in control of the trust assets and is in charge of managing trust assets, filing taxes, and making distributions according to your wishes.
Power of Attorney
A Power of Attorney (POA) is someone you can rely on to make financial, medical, and other major life decisions if you become incapacitated. For example, if you have a stroke and are incapable of making decisions, a POA can make decisions for you, including paying your bills, signing forms for you, etc.
Executor
An executor is an individual who will be responsible for completing settling your estate and transferring your assets according to your wishes.
What Do Your Advanced Care and Medical Plan Include?
Describe your wishes for long-term care. For example, if you want to age in place, describe what kind of care you would like, how you plan to pay for care, and how you will live your last days at home.
Discuss your medical wishes in case a moment comes when you are not able to speak for yourself, such as the end of life care, ventilation, or life-sustaining procedures. Consider establishing a health directive and sharing these details with your family.
How Do You Envision Your Celebration of Life?
Prepare and communicate how you want your funeral to be arranged. Write down all your preferences from the invitees to the location of your burial or cremation. If you have prepaid for your funeral expenses, don’t forget to share the details with your children.
Explain the “Why” Behind Your Plan
As you designate your children’s roles, describe your financial and life journey that influenced these decisions. Adding context to your estate plan can prevent future conflict and encourage peace amongst your children.
Talking about your estate plan is difficult. Rather than avoiding the discomfort, try to address it directly. Ask your children to explain their concerns so that you can address the root cause of their worry. Back-and-forth conversation demonstrates that you care and have your children in mind.
Before ending the conversation, ensure you have answered all your children’s questions. If there are no questions, leave the door open to discuss the conversation later. Estate conversations can be draining, so your children may need time to process the information.
How to Start the Conversation
Talking about your estate plan with your children is an intricate topic. Selecting the right time and place for this conversation is essential. Holidays, family gatherings, and family trips are usually some of the best times to start the conversation.
Here are some ideas to start the conversation:
Share Stories About Friends and Family
“I was thinking about the difficulties that (a family member or friend) had. I want to create an estate plan so I don’t become a burden to my family. Let’s talk about how we can work together to prevent this from happening to us.”
Talk About Your Long-Term Care Plans
“I’ve been thinking about my long-term care plan, and I want to ____. I want to share my plans in case they impact you.”
Discuss the Family’s Assets
“I’ve always loved (family asset or heirloom). I have been thinking about what to do with _____ when I am gone. I want to share some ideas with you for my plan with it down the road.”
Think About Your Family Members
“I want to help (a family member) with their education and/or leave some money for charity. I have some ideas on how I would like to accomplish this.”
Estate planning involves more than just putting several legal documents together. An estate plan can serve as a roadmap of your wishes for your next stages in life, one that you can share with those closest to you. A comprehensive estate plan can be daunting, but it is essential to help your family be well prepared for the future.
Let’s Have a Conversation:
Are you among the 50% of the US population who have established a will? What parts of your estate plan have you discussed with your family? Based on the knowledge that you have gained from this article, when do you plan to initiate the “estate talk” conversation? What do you fear most about having the “estate talk” conversation?
