Having an Estate Plan Is Essential – So Is Discussing It With Your Children

Emotions flare during the reading of the will in the hit movie “Knives Out.”
Credit: T-Street Productions

Reading-of-the-will scenes have become a fixture on TV and in films because of the sure-fire drama they can unleash. And experts warn that if you don’t discuss your estate plan in advance, you may be setting up your would-be beneficiaries for a little drama of their own when they learn what you have — or haven’t — left them.

For many people, discussing wills, asset distribution and end-of-life wishes with adult children induces a strong urge to procrastinate.

“Death and taxes. Nobody wants to talk about it,” said Lawrence J. Macklin, president of the National Association of Estate Planners & Councils.

But estate planners list several reasons it’s best to take a deep breath and press on — and do it with the help of someone who specializes in estate planning. 

Start Sooner Rather Than Later

While people tend to put the task of estate planning into the I’ll-get-around-to-it-eventually basket, professional planners urge their clients to have conversations about their estate while they’re in good health and able to clearly articulate their wishes.

“You just never know in life what’s going to happen tomorrow, so you can’t put it off,” said Macklin.

Sometimes clients are spurred into action by an event that makes them consider their own mortality — an upcoming plane flight is often a trigger, Macklin said. He recalls another estate planner’s client who wanted to get his will done because he was about to jet into today’s crowded skies. “When are you leaving?” the planner asked. “Tomorrow,” the client said.

Because that document requires more time and forethought than 24-hour dry cleaning, the man boarded the plan without a will, presumably with his fingers crossed.

Credit: Kindel Media via Pixels

Transparency Is Critical

The 1960s comedy duo the Smothers Brothers made a running gag out of one brother’s complaint that “Mom liked you best!” Such suspicions can arise when it comes to an inheritance. Macklin said while most parents he works with today plan to distribute their assets evenly among their children and are willing to discuss their plan, misunderstandings can happen. And an even split isn’t always an option that seems right to the parent, which is why having a family discussion is important to avoid hurt feelings or worse.

For example, Macklin had a client with a son who was irresponsible with money, and a daughter who was the opposite. The father’s unfortunate solution was to put his son’s money in a trust that his daughter would manage. “How do you think that made his son feel?” Macklin asked. A better choice, he said, would have been to have his son’s trust overseen by a third party, such as a certified professional trustee, who manages trust assets as an independent fiduciary.

In another case, one of three children was struggling financially, and the parents wanted to give that child a larger benefit. They discussed it with their other children, who were well-established financially, and they wanted to help their sibling by taking smaller portions.

Sometimes the assets themselves make things trickier, Macklin pointed out. For instance, what do you do when one child was involved in the family business and the other wasn’t? One solution, said Macklin, is to leave the business to the child who helped run it, and give the other child an equal cash benefit.

Explain Your Choices

The bottom line, says Macklin, is that open communication and planning are crucial for avoiding potential conflicts and ensuring a smooth transition of assets. That includes explaining your reasoning for the distribution choices. And if your children have issues with it, listen to them.

Beginning this process long before your demise has an added advantage. Getting children to think about the best way to handle their inheritance will help encourage financial literacy. You can further stimulate that process by asking them about their financial goals and how their inheritance might help achieve them.

Focus on Harmony

Just as you expect them to respect your wishes, accept your children’s choices in return. Estate planners counsel that what your beneficiaries have in mind for their inheritance may not be what you would prefer, but it’s their decision. In the end, your final act on behalf of your family should foster harmony, not acrimony.

Update Regularly

Once you have your estate plan, Macklin noted, you can’t just toss it in a drawer. Life happens and things change. Revisit your plan on a regular basis to update as needed to reflect divorce, new assets, additional children and their changing circumstances.

By following these guidelines and engaging in open and honest communication, you can create an estate plan that reflects your values, supports your children’s financial well-being and minimizes the potential for conflict within the family.