Estate planning tips
One common goal I hear from people, regardless of the net worth, is they want family unity. Some of the biggest heartaches can come from the smallest of matters. Children will say things like “It doesn’t matter, Mom”, or “Spend your money and be happy”, or “We will work things out no matter what” – until the time comes, sometimes.
Large estates have more to lose in taxation, but all estates have a lot to lose when it comes to keeping a family intact. If you want to improve the chances of family members getting along, it may start with creating a better understanding of how everyone feels. And that can begin with better communication.
It is difficult to talk about the end of life. However, family meetings can allow people to express opinions in a setting designed for exactly that purpose. An agenda and a set of goals will keep the conversations on track.
Emotional outbursts at unexpected times may be a sign of true honesty and raw human interaction and that is good too, but if it is not a part of a broader scope of discussion it may lead to less understanding, not more.
If it is too difficult, consider getting a third party involved to chair the meetings. For basic discussions, perhaps your financial planner would be able to help. That person would already be familiar with your situation and probably some or all the family members involved. You may have beneficiaries that are not family members. The same principles could apply in these situations.
You may consider a professionally trained mediator if the stakes are high and there are serious issues. Research that area and get some legal advice as well.
I am not a certified mediator, but I have assisted in many family meetings as the financial advisor where knowledge of the situation was critical. For example, by chairing the meeting which involved virtual participation with siblings living miles away the widowed mother was able to explain what her will said and why it was done that way.
It involved business assets that one child was taking over, so life insurance was purchased to provide an inheritance for the non-business heirs. That way the business could stay intact and was much less vulnerable to unnecessary risk.
With the business transfer plan in place the conversation then focused on non-business assets such as the family home, investments, and personal items.
I recommend doing an estate inventory and itemize how you want the significant assets distributed. Are there family heirlooms that cannot be divided? Are some items more sentimental for one beneficiary over another? Is distance to a destination a factor? Or perhaps no one wants some things that you feel they should – like the “china”. Have you ever heard anyone say, “Young people aren’t interested in old stuff”? Logic may come into play for these types of decisions. Having the discussion together about what should happen may save a lot of hardship later.
A good plan will tie all aspects of your estate together. The funeral plans, which can be a discussion for another article, may also be part of the family meeting.
Tom Hyde, CAFA, PAg is an estate and financial planner with Pallister Financial.
The information in this article is not intended to be legal or tax advice. You should contact your legal and tax advisors for proper legal and tax advice.
