Should I Talk to My Kids About My Estate Plan?

Many parents shy away from discussing money with their children, often because the conversation can be uncomfortable, they don’t view it as urgent, they’re concerned about how it might affect their children, or they have some other personal reason for not doing so. Even more challenging, however, is discussing your estate plan, which can feel particularly daunting and gloomy, especially when you're planning far into the future and expect many more years of life ahead. Despite all that, this conversation may be critical to the seamless transfer of your wealth and to help secure the legacy you’ve worked so hard to build. While the decision to have this conversation and how much you're willing to share is entirely up to you, if your children are old enough and you are still hesitant, here are three compelling reasons why you may want to consider doing so today. Sorry in advanced, this one may get a bit morbid.

You Get a Chance to Explain Your Motivations

It’s not uncommon for estate matters to get a bit tense among heirs. They might question your decisions, wondering, “Would Mom and/or Dad really have wanted it this way?” Whether it involves giving a large chuck of the estate to charity, favoring one child with a larger portion of the estate than the others, dividing the estate equally when one sibling is better off financially, or choosing one sibling over the others to serve as your healthcare proxy or Power of Attorney, these decisions can trigger strong emotions and potentially lead to conflict. While reading this, you might be thinking, “My children get along great; we won’t have this issue.” However, you might be surprised by what can happen when money and the intense emotions stemming from loss collide. Discussing your estate plan early provides you with an opportunity to explain your decisions and allows your children time to digest and come to terms with those decisions before the inevitable happens.

You Can Gain a Better Understanding of your Children’s Needs

In your mind, you may have the perfect estate plan laid out, but what happens when this is not what your children want? By starting this dialogue, you can work together with your children to determine the best course of action, keeping in mind the very people for whom the plan is ultimately intended. Perhaps you’re operating under the assumption that your children want to sell your house and divide the proceeds, when in reality, one of them really wants to raise their family there. Or, maybe you’re assuming your daughter, the doctor, would be the ideal person to serve as your healthcare proxy. However, after discussing it with her, you may find that she has witnessed some of her colleagues go through this very situation and is concerned about her ability to act rationally. Maybe she thinks her brother, the engineer, would be better suited to handle this difficult role. Without having these difficult conversations with your children, you may be making decisions about your estate that you think are best when in reality, they feel differently.

You Can Ease the Burden on your Loved Ones

The last item on our list may just be the most important reason why you should discuss your estate plan with your children—to ease their burden. Ideally, you’d want to simplify things for them as much as possible, because losing a loved one is hard enough as it is. In such a challenging time, marked by sorrow and mourning, dealing with estate matters is likely the last thing they’d want to do. Not to mention, as they become overwhelmed by intense emotions, they might not make the wisest decisions. For instance, it's not uncommon for grieving children to squander their inheritance on impulsive purchases in a vain attempt to soothe their sadness, especially if they are not accustomed to the kind of wealth you have transferred to them. Talking to your loved ones early can help them prepare for this situation, potentially sparing them from making rash decisions and allowing them to focus on what’s important – grieving.

Final Thoughts

In conclusion, the decision to discuss your estate plan with your children can be a profoundly impactful one. While the thought of such a conversation may seem daunting, the benefits far outweigh the discomfort. By opening up about your estate plans, you not only can explain your intentions and ensure that your wishes are understood and respected, but you can also provide your children with the clarity and preparation time they need for a future without you. This dialogue can prevent potential conflicts, enable you to better plan for their needs, and significantly ease their emotional and administrative burden during a time of great loss. Remember, these discussions are really about fostering understanding, preparing your loved ones, and ensuring that your legacy is preserved in the way you envision. Therefore, despite the morbid undertones, engaging in this type of conversation can be one of the most caring and responsible actions you can take for your family’s future.

Raymond James and its advisors do not offer legal advice. You should discuss any tax or legal matters with the appropriate professional.