Spectrum Management Blog

By Tia M. Lee | July 30, 2014

Estate planning: 4 areas families must discuss

In a recent post, I covered what can happen when a parent does not talk about their estate plan with their family. Today, I am going to follow up on the topic, providing ways to communicate about estate plans while still maintaining privacy.

According to Fidelity Investments' Intra-Family Generational Finance study:

  • 30 percent of parents were uncomfortable discussing  their financial matters with their children because they did not want them to know how much they might inherent
  • 22 percent avoided the conversation because they felt it would upset their children
  • 15 percent avoided the conversation because they felt financial matters were none of their children's business  

My previous post offered an example of a family that never discussed financial matters for these same reasons. When their father passed away, the lack of communication caused significant confusion and conflict -- his family knew nothing when he passed away.

If you are a person who wishes to maintain privacy, there are some key points you can share with your family without giving away the farm, so to speak. Ultimately, discussing estate plans is vital to help a family move through what is already a difficult time. Consider discussing the areas listed below.

List your financial advisors

Prepare a list of your financial advisors, which includes their contact information and the role they will play when you pass away. The list should include your attorney, accountant, investment professional, financial planner, insurance agent, and any other key professional who could potentially come into play at that time. The best scenario would be to introduce them to your family and convey your trust.

Discuss sentimental items

One of the biggest sources of conflict is items that have significant emotional value to family members. If your family has sentimental attachment to specific items, give them away ahead of time or provide written instructions. Then, go one step further -- discuss your reasoning with your family. They may not like it, but they will accept it better coming from you.

Provide details about the legal steps necessary to settle your financial affairs

Many people underestimate the amount of work and time involved in settling an estate. Oftentimes, family members feel like the assets belong to them because they are the heirs. While this is true, the administrative steps to settle an estate cannot be rushed, which causes delays. When family members understand and expect delays they are less likely to become frustrated by the process.

Review all estate and financial documents and where each is located

Make sure all your documents are congruent with no contradictions or ambitious language. Estate planning documents are typically rewritten, which leads to conflicting directions if not reviewed comprehensively. The following documents should be reviewed on a regular basis to be sure they express your wishes: wills; trust documents; titled property (home, cars, etc.); life insurance policy beneficiary designations; retirement account beneficiary designations; annuity beneficiary designations.

By discussing these four areas, your family will at least know what to expect even if they do not know every detail. Setting the right expectations will help to minimize the possibility of conflicts arising down the road. 

Estate Planning Checklist

Topics: Tia M. Lee, Estate Plans, Income Tax and Estate Planning