What Your Family Needs to Know About your Estate

By Cindy Diccianni, Financial Advisor

Keeping secrets about your estate plan from heirs and family is probably the easiest way to ruin all of your careful planning. Our culture teaches us not to tell our heirs - typically our children - about our estate plans: how much it is worth; who will receive what and how much; and where our financial documents are located.

Often, animosity between family members spills over into court following the death of the estate owner, and this can destroy your original intent. Such secrecy is often the reason why estate plans are not created in the first place, causing the estate to pay out more in estate and inheritance taxes than should have been necessary, or resulting in distribution of assets to people or in amounts not desired by the deceased.

Ultimately, it is a deeply personal choice as to whom you wish to discuss your estate plan, and how much you wish to reveal. But the larger and more complicated your estate, typically the more critical it becomes that the major heirs be informed before death. Financial Advisors and Estate Attorneys offer several suggestions when thinking about when and with whom to discuss your estate plans.

How to help your heirs do their own planning

You can help your heirs make better financial planning decisions if they know your intentions. For example, if you plan to give most of your estate to a charity, they may avoid committing themselves to buying an expensive home on the assumption that their inheritance would pay off the mortgage. A charity also can plan better, or suggest changes to you, if you plan to give it a large bequest. A charitable remainder trust can be very beneficial in this scenario.

When you want to make unequal bequests

Some family members may be better off financially than others because of their professions and incomes, or you may have an heir who has a disability from an accident or may need extra financial help. It can reduce potential friction among heirs and court challenges by explaining ahead of time why you are bequeathing more to one heir than to another.

Second Marriages

In today's world more and more people are getting married for the second and even a third time. Often, there are children from previous marriages who are heirs to the assets of the deceased. Second marriages are a major source of conflict in estate planning. Advance discussion can help smooth out potential problems.

Family Meetings

To help the inheritance process go smoothly, consider holding a meeting with all of your major heirs. Here are some guidelines for making the meeting a success.

  • Develop and revise an agenda with feedback from the heirs.

  • Hold the meeting at a neutral site, like a hotel. Be sure to screen out all phone calls and any visitors if the meeting is held at home.

  • Share the general outline of the estate plan in writing, and explain why it is set up the way it is.

  • Indicate your openness to change the plan, but make it clear to everyone involved that the final decisions will rest solely with you.

  • Do not commit to any changes at the meeting.

  • Encourage your heirs to express their wishes and their concerns.

  • Invite your financial advisor to assist you in running the discussion and clarifying any issues.

  • Create a file to keep all of your documents together. I call my file an "If I Die File".

  • Update all of your legal documents every year, if necessary.

You may want to use this meeting as an opportunity to inform your heirs where to find important documents and records. This helps to avoid frustrating searches for wills, safe deposit box keys and financial documents. Inform whomever you named as executor of your estate, give them details about your estate plan, and most importantly, explain the intent of your decisions. Don't "surprise" them at your death.

It's never easy to discuss what comes after your death. But with careful planning, you can ensure that what happens to your estate is what you intended.

Cindy Diccianni is a Registered Nurse, a Certified Senior Advisor (CSA), a Registered Investment Advisor and a Registered Representative with Leigh Baldwin & Company member NASD and SIPC. She is affiliated with Ortner, O'Brien & Ortner Advisory Group, Inc. and co-founder of Nurturing Your Success, Inc. Her passion is assisting clients in creating financial freedom. You may visit Cindy at www.nurturingyoursuccess.com, write to her at Cindy@nurturingyoursuccess.com or call her directly at (610) 251-9393.


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