Talking To Loved Ones About Estate Plans

Discussing one's plans for distributing their estates with loved ones can be an uncomfortable topic for many. Reasons for this discomfort may include not wanting to reveal the potential inheritance amounts to children or the possibility of changing one's choice of heirs in the future. 

However, failing to discuss estate plans can lead to disagreements and conflicts upon the revelation of the details.

For example, unequal distribution of assets among siblings following your death can cause resentment, even if one child is less financially stable than the others. Similarly, children from a previous marriage may feel resentful if assets are left to a current spouse upon your passing.

It may become difficult to express one's thoughts and desires for the distribution of assets once the individual is no longer alive. 

By discussing estate plans, one can communicate the distribution of assets to heirs and provide reasoning behind the decisions. This may include detailing the specific distribution of each asset or providing an overall understanding of the plan.

It may be beneficial to provide an explanation for why a specific heir was chosen as executor of the estate. Alternatively, one can leave a personal letter along with estate planning documents outlining these reasons.

In addition to discussing estate plans with heirs, it may be beneficial to include a personal letter outlining specific instructions, such as wishes for distribution of personal effects, funeral and cemetery preferences, and the location of important documents.

At a minimum, specify where to find: 

• Income tax returns.

• Life insurance policies.

• Other insurance policies.

• Investment details.

• A list of household contents.

• Outstanding loan documentation.

• Automobile titles.

• Important warranties and receipts.

• Bank account information.

• Credit card details.

• Information about your home.

A personal letter can assist heirs in identifying assets and benefits and prevent confusion about one's wishes. Writing the letter also encourages organization of records and ensures important documents can be easily found. To ensure the accuracy of the information, it is recommended to review the letter at least once a year. 

Your Children's Estate Plans
If you plan on leaving a substantial estate to adult children, it is important for them to have their own estate plans in place. To motivate them to plan, the following tips may be helpful:

Explain why estate planning is important.

It is important to not dictate the actions of adult children, but rather to stress the importance of estate planning. During significant life events, such as marriage, divorce, or the birth of a child, it can be beneficial to remind them to review their estate plans. 

Coordinate estate planning across generations.

When having a significant estate, it may be advantageous to align your planning efforts with those of your adult children. For example, if your children also have substantial estates, they may desire for their inheritance to be passed down to your grandchildren. Coordinating plans can help reduce taxes.

Motivate your adult children to establish important estate planning documents, such as a will, advanced health care directive, and power of attorney.