Talking to Your Heirs About Your Estate Plan
The idea of talking to your heirs about your estate plan may fill you with anxiety or fear. Maybe even resentment (It’s none of their business) or guilt (I’m not leaving as much as I’d hoped).
Those feelings are normal — and shared by lots of people.
But it’s important to have those discussions, not just about your legacy but about end-of-life issues as well. Your estate plan doesn’t just determine how your assets will be distributed. It also includes information about what will happen if you become incapacitated, who you want to make medical decisions on your behalf.
Providing this information before they’re in the middle of a crisis or deep in grief is one of the most helpful things you can do for your heirs.
Concerns about talking to your heirs about your estate plan
A recent study by Ameriprise revealed that only 19% of people who intend to pass assets on to their heirs are transparent about what they’re leaving.
Why the resistance to sharing that information?
- 33% of respondents said it’s just not any of their business.
- 32% said they’ve shared some information but don’t feel it’s necessary to be completely transparent.
- 18% said they don’t want to deal with any conflicts that might come up.
- 16% said they don’t want input from their heirs.
See: Who Needs an Estate Plan?
Why it’s important to tell heirs about your estate plan
What was particularly interesting about Ameriprise’s study is that 80% of these same people said it’s important to them to pass on their financial values to their heirs.
Having those conversations about financial values is a great place to start talking about your estate plan.
See: Estate Planning for High Net Worth Individuals
You have an opportunity to explain yourself
Probate courts are filled with siblings fighting about their parent’s estate plan. They can’t imagine why their mother would’ve left more to one sibling than the others. Or they think they do know why, and it reinforces resentments about favoritism they’ve carried their whole life.
These conflicts are especially sad because it’s possible they could have been avoided. Perhaps a mother left more to her daughter Maggie than to her son Jason because she helped pay for Jason’s college and graduate school tuition when she was alive. It seemed fair to her to give an equivalent amount to Maggie after her death.
There are many thoughts, circumstances, and feelings at play when a person creates their estate plan. By the time the heirs receive their inheritance, they may not know anything about what their loved one was considering when they drafted the documents.
While conversations about estate planning can sometimes be challenging, they reduce the possibility of misunderstandings in the future.
See: Estate and Succession Planning for Family Businesses
You can help your loved ones prepare for your end-of-life needs
Finding out that you are — or are not — the person making medical or financial decisions for your loved one can be challenging. That’s particularly true if you learn that information in the moment that you’re having to make a life-or-death decision. (Or you think you should be the one to make it, but you’re not the one designated.)
Sharing that information in advance can help your loved ones (most likely your spouse and/or children) come to terms with your decision. It also gives you an opportunity to talk about what your wishes are — about everything from comfort measures and resuscitation to what kind of funeral or burial service you’d want.
On a somewhat more pragmatic note, you may need to prepare your children to be thinking about the logistics and finances of your end-of-life care. Are you anticipating that they’ll be able to help you remain in your home until your death? Do you think they’ll need to offer financial support with getting into a nursing home facility?
They may need to make decisions now that will prepare them to offer the support you need when the time comes.
See: Estate Planning for Second Marriages and Blended Families
You can gain a better understanding of their desires
Perhaps you’re in the 16% of folks who don’t want your heirs’ input on your estate plan.
It’s ultimately your decision, of course. But if you open up the conversation, you may learn something that will be helpful to you in creating a plan.
For instance, perhaps you’ve been planning to sell a vacation home you no longer visit and put the proceeds into an account that you’ll split equally among your three children. But in talking with them, you learn that one child feels very emotionally attached to the vacation home because she has so many happy memories there. She would prefer that piece of property over any cash assets. You can take that into consideration.
You may learn that one of your children has done a great job preparing for retirement and saving for their children’s college education, and the other has really struggled to put anything extra away. You can take that information into consideration.
See: Setting Up a Trust for Your Child: Avoid These Mistakes
You can ease a painful burden
Whether you choose to share estate plan information with your heirs — and how much you choose to share — is entirely up to you.
If you’re still uncomfortable having that conversation or if you just don’t feel like it’s necessary, that’s your choice. At a minimum, though, tell loved ones where they can find important documents (like your will, trust paperwork, advanced directives) and the contact information for people like your attorney, accountant, and financial advisor.
We talk a lot about how estate planning gives you peace of mind. Knowing that you’ve provided for your heirs in the best way you can is invaluable. Having a conversation with them about that plan eases the burden they’ll experience when your life does eventually end. Schedule a phone or video consultation with Siedentopf Law to talk about your estate planning needs.