One of the reasons you’ve put off having an estate plan is that you don’t want to have difficult discussions with your adult children. You’re nervous about telling them how much money you’re leaving to each of them and whom you want to be in charge of administering the estate.
One of the most difficult parts of developing an estate plan is deciding how much information to share with your kids and other heirs. Estate planning and financial experts generally agree that you don’t need to disclose every detail of your plan. However, some things should be discussed while you’re alive and well.
Who will have powers of attorney and administrative responsibilities?
Remember that not all of your estate plan deals with what happens after you pass away. You should designate medical and financial powers of attorney to one or more trusted people to handle those matters if you become incapacitated and unable to make decisions. Make sure that the people you choose agree to handle these responsibilities. It’s also wise to let other family members know whom you’ve chosen and why.
The same is true for those you choose to be the executor of your estate and trustees of any trusts you set up. These aren’t roles anyone should learn they’ve been given after a loved one has passed away or become gravely ill. Again, let other family members know so they’ll be less likely to cause problems for those you’ve chosen.
Some discussion about inheritances can help with financial planning
You might think it would be fun to surprise your children with significant inheritances. However, one certified financial planner cautions that “sometimes inheriting big sums of money can have a traumatizing effect on the heirs if they are totally unaware of what’s coming.”
On the other hand, maybe the kids are expecting more than you have (or intend to leave them). Giving them an idea of how much to expect can help them with their own long-term planning. Maybe you’re leaving your children more than the others. It’s best to explain your reasoning to all of them so they’re less likely to turn on each other after you’re gone.
Your estate planning attorney can provide some guidance for having these and other difficult conversations with your family. They will also be there to support the people you’ve chosen to handle your estate plan when the time comes.