A Minneapolis Estate Planning Lawyer Explains How to Discuss Your Estate Plan With Adult Kids
It is a common occurrence to have clients come to me after a parent died and say “I didn’t know XXX (fill in the blank) about my Mom or Dad.” Many parents feel reluctant to discuss financial and estate matters with their children. However, any good estate planning attorney would encourage (even urge) you to have this discussion. Sometimes controversies are unavoidable when a family member becomes ill or has died (thus the value in having a plan that is defensible), but many times conflict can be avoided simply with open communication. And, face it, most of the family already knows if there is likely to be an issue with a brother, aunt or other relative.
- You and your kids will benefit from have an open talk about the following topics.
- Your children should recognize what form their likely inheritance will take.
- Will it be given outright or in trust? If in trust, why? To protect them from themselves? Or the inheritance from the breaks of life?
- Will the inheritance be liquid, real or personal property?
- Will the inheritance be in the form of a qualified retirement account (such as an IRA)? If so, what are the benefits of taking no more than the required minimum distributions?
- What is your intention for the inheritance? Is it a safety net, or for some greater purpose?
After you are gone, your children may struggle at guessing your intentions. So, it’s important to document and describe to your children your wishes with respect to medical treatment particularly with respect to end of life decisions. Remember, your Health Care Directive provides legal authority for your care and treatment, but does not provide instructions as to your wishes. Having a frank discussion with your children could significantly reduce their stress in making difficult decisions on your behalf.
Please take care with your tone during this difficult conversation. An estate plan reflects more than just your financial wealth – it is a reflection of your values and the values you have instilled in your loved ones. Your children have interests in your estate plan that go beyond simply the financial, and the wrong tone could be misconstrued.
Lastly, make sure your children know where all your important documents are kept. Avoiding the “morbid scavenger hunt” can significantly reduce the burden on your loved ones during an estate settlement. I provide my clients with a database to keep copies of all their documents and allow another person access in an emergency.