Washington family dynamics can always be a source of frustration for parents and their kids as well. Death is a difficult topic for anyone to talk about, but when family drama is brought into the situation, it can be commonly ignored. Estate planning is a critical topic to discuss with your family, but how can you discuss this commonly ignored topic?
The baby boomers are entering the final stages of their lives. With that comes trillions of dollars that their beneficiaries will inherit. But, just a small percentage of families have discussed financial plans with their kids. UBS recently did a study of their clients. Of those surveyed, over 80 percent had a will, but only half shared the will with their kids and a third discussed what their assets are with their kids. Around 50 percent of parents talk about inheritance with their kids. Although most parents want the transfer of assets to go smoothly when they die, without talking to the children, it could lead to family headaches.
Reasons given for why parents do not talk to their kids about their inheritance, trust administration and estate plans include not wanting their children to know how much they are going to receive. They do not want to confront dying. They are uncomfortable discussing financial matters with their children, and they are concerned about their heir's financial judgment.
Regardless of the reasons, talking with children regarding estate plans is important. Working with kids in the estate planning process can make sure that everyone is on the same page, and the plan is acceptable. Sources of frustration, such as vacation homes and siblings who may need more money, can be worked out fairly and in the open, reducing the possibility of sibling fights after the parent's death. There will be no surprises when the parents die, and the children receive their shares of the estate.
Source: New York Times, "What's almost as certain as death? Not talking about inheritance," Paul Sullivan, Aug. 1, 2014