How to Talk with your Beneficiaries about your Estate Plan?

Estate planning always has one common goal. This goal transcends levels of wealth, nationality, and demographics. The main goal should always be: to thoughtfully and carefully transfer wealth to the people most important you in a way that enhances their lives and fulfills your wishes for them.

When developing your estate plan, the first step should be to identify what your goals are. Start with determining your beneficiaries, and move towards determining the assets you’d like to give every one of them. After you have quantified your goal and designed a tax efficient distribution plan with your estate planning attorney, the next question you should ask is: When should I tell my heirs?

Some clients are more open than others when it comes to talking about money. Some may have a specific reason why they need to talk about it, while others may not feel it’s not appropriate until after they have passed on. Every client and their family have different needs and goals, and you are going to hear varying opinions on the subject.

What information you share and how you share it depends on your needs and circumstances.  An advisor can be a great resource in helping you plan for and structure the discussion.

The following needs to be taken into consideration:

– Could collaborative discussions help your heirs with their own planning?

– Are there areas of conflict that might be made worse by discussing your assets and future plans?

– What result would you want from the discussion?  How likely is that to be achieved?

– Is there a risk of negative consequences? For example: a child not pursuing education or employment due to expected wealth.

– Is there a need for financial management skills that the conversation could help drive?

 

Your advisor can help determine how to have the conversation and how to bring in outside counsel.

Even if you ultimately decide against sharing this information with your beneficiaries, you should still talk with other professionals, including your advisor, insurance agent, and attorney.  They can help have these conversations for you when the time comes.