How to Talk to Your Adult Children About Your Estate Plan by Nancy Fehrenbach, CFP®, CFA

Estate planning is a topic that is important to discuss but many people avoid talking about it with loved ones.  We don’t want to bring up the difficult topics of declining health and death, or we do not know how to begin the conversation.  Sometimes we don’t want to share the details of our personal financial situation—even with family. But, as you won’t be able to guide your adult children when the estate plan you created is needed, you should be having that conversation now.

In a recent survey by The Harris Poll on behalf of Fifth Third Bank, a full 43 percent of people age 50 to 75 said they had not had any discussions with their loved ones about what they plan to leave behind.  The most common reasons were they didn’t want to upset family members, they felt uncomfortable thinking or talking about the topic, and they didn’t want to cause family conflicts.

Why do you communicate?

A fundamental tenet of Moller Financial Services’ comprehensive financial planning is to create an estate plan. Working a lifetime to be able to pass on a legacy to your family is a proud accomplishment.  Creating the infrastructure of estate documents to pass that legacy on in a smooth manner is part of the plan.  As you complete the plan, you have signed wills, possibly set up trusts, retitled accounts, and created powers of attorney for both property and health care.  But have you shared the details with your adult children? If the plan has not been communicated to your family, all that work to smoothly pass on your legacy may go out the window.  No one wants their passing to be a cause of stress and conflict for their loved ones.

Not communicating about your estate can catch some adult children off guard.  Some may think they will be inheriting large sums and not feel they must work hard and save.  I have known some adult children who lived that way, not knowing that their parents had given much of their wealth away. Even if we have a financial advisor relationship with both parent and child, client privacy prevents us from informing either the parent or the child of the other’s situation. On the other side, some may have far more wealth than their children imagined and the children are unprepared to handle that wealth.  In that instance, building a relationship through the generations with Moller Financial that your children can rely upon is important, not only when the time comes, but potentially to give them a greater understanding so they can grow into the responsibility.  We have successfully helped younger clients grow into their wealth and parents create this gift of knowledge as part of their legacy.

What do you communicate?  

The dynamics of each family will uniquely dictate what and how much to share. You want to have a clear idea of what you want to discuss with your children before you start the conversation. And you want to be on the same page as your spouse about what you communicate.

Some may simply want to inform them that an estate plan is in place, where they can find the documents, and who to contact, such as Moller Financial or your attorney, when the time comes.  If you intend to have your children take on responsibilities in the estate process, as an executor, or as a power of attorney for property or health care, they need to know ahead of time. Informing children of who does have those responsibilities ahead of time reduces confusion. Some are comfortable adding further detail, explaining the structure of the plan and how assets will flow.  And still others are very open and provide their children with an idea of the assets they may inherit.  There is no right answer of how much to share; it really depends on your family’s dynamics.

Another topic that you will want to speak about is your desires for medical decisions.  A living will outlines your desires for medical and end-of-life decisions, helping everyone through a tough time. Having this document in place and communicating who holds those powers ahead of time reduces hurt feelings and confusion at a very stressful time.

Many times, adult children simply want to know that there is a plan in place. Most want to respect your wishes, but it may never have been clearly communicated until you have this conversation. Children appreciate knowing that you are likely to be financially independent and are unlikely to impact their own financial plan. If you may need help, knowing with time to prepare allows them to be there for you in a better way.  Ultimately, most just want to know that you are okay, that you have thought about the future, and that you have a plan for this stage in your life.

How do you communicate the plan?

It is common for people to feel awkward broaching the subject of estate planning.  They do not know how to bring up the subject and are afraid they will make their children uncomfortable when they do bring it up. One suggestion is to mention this article as a way to bring up the subject with your children.  If you have updated your estate plan recently, that also could be a fact to mention, allowing you to segue into more particulars of the estate plan.  Others appreciate a third party and have a meeting with their financial planner or estate attorney to communicate the information in a factual way.  We at Moller Financial are happy to facilitate such a conversation.

Talking about estate planning is often a multi-conversation topic.  You may first want to talk about more mechanical aspects – where are the legal documents, what your long-term healthcare plans or wishes are, and who would be key people to contact.  A subsequent conversation may be a bigger picture of the estate plan.

Choosing not to disclose all the details is okay.  Your situation may change as may your children’s.  It may just not be appropriate in your family dynamics to get into that level of detail.  For others it is just another fact of their lives, and they speak freely about the specifics.  You will know what is best for you and your family.

Even if you have dotted the i’s and crossed the t’s in documents, if you have not communicated your estate plans, the lack of communication ahead of time reduces the plan’s value.  The estate plan is part of your legacy so don’t just give them financial wealth, give your children the gift of knowledge and peace of mind too by having the conversation before the plan is needed.

Reach out today. This could be the start of a great relationship.

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