Money and death are often uncomfortable topics to talk about. Yet they can lead to significant conflicts among loved ones if left unspoken. This post explores how parents—and anyone in a similar position—can effectively prepare and communicate their estate plan to their children. The goal is to ensure they are ready for what lies ahead and to preserve family relationships after you are gone.
My Estate Plan is Complete – What’s Next?
You’ve worked with your Attorney to draft your Will, Power of Attorney, Living Will, and possibly a Trust. Many people assume that completing these documents is the end of the process, but communicating your plan to your children is important.
Before diving into that conversation, there are two important steps you may need to take to prepare for this discussion:
1. Get Organized
Studies show that 52% of children don’t know where their parents’ estate planning documents are located. To ease the burden on your children during a time of grief, it’s crucial to keep all estate planning documents and account information in one accessible place. This will prevent them from having to search for assets and details amidst their loss.
Here are a few ways to get organized:
- Annual Statements – Print and store statements for each account in a folder with your estate planning documents.
- Tracking Systems – Use an Excel spreadsheet or an estate organizer to keep track of account numbers, contact information and other details. Update and print this annually, and store it with your estate planning documents.
- Organizational Systems – Consider using a system such as Noxbox, which organizes all necessary estate information and instructions in one place.
The key is to find what works for you and stick with it.
For secure storage, consider a fireproof safe bolted to your home’s floor or a safe deposit box at your bank. Both options have their advantages and disadvantages, but security is crucial in case of emergencies like fires.
Ensure your agents (Executor, Trustee, Power of Attorney, etc.) know where to find your documents and how to access them. Regularly revisiting this information is important to keep everyone informed.
2. Contact Financial Organizations
If you have a Power of Attorney (POA), reach out to each financial organization to understand their procedures for adding a POA to your accounts. This process can be time-consuming, often taking weeks or more, and each institution may have its own requirements. Plan ahead to manage this process smoothly and ensure your POA is properly established for all relevant accounts.
Why Discuss Your Estate Plan?
There are three main reasons discussing your estate plan is wise:
1. Your Children Might Feel Anxious
As you grow older, your children may feel uneasy about bringing up your plans, even though they’re concerned about your health and future. They care about you and want the best for you, but might hesitate to bring it up as it is very personal. By starting the conversation yourself, you can ease their concerns and help them understand how you’ll be cared for, making the discussion more comfortable for everyone.
2. Money Tends To Bring Out The Worst In People
Inheritance disputes have often led to family rifts and strained relationships. Even if you believe money isn’t a major motivator for your children, it’s wise to address this issue while you’re still here. By discussing your plans openly, you can help your children better understand and prepare for any potential conflicts.
3. Communicating Your Intentions Is Crucial
A Power of Attorney, Will or Trust are legal documents that outline your wishes. However, they are generally written in very cold legal language, which does a poor job of conveying your intentions. Providing a clear explanation of your underlying intent can help reduce the likelihood of conflicts and prevent misunderstandings.
Your estate plan is not about you, it is about your loved ones. Helping them understand your plan, your intentions and who will be helping, can be very beneficial to your children.
How To Communicate Your Estate Plan
There are three main ways I have seen used over the years:
Option 1: Talk With Your Agents
Hopefully, you asked the people you want to designate as your Power of Attorney, Executor, Trustee etc if they are willing to serve in that capacity before putting them in your legal documents. It is helpful to meet with them to review your intentions and wishes, so they clearly understand your plans. Consider drafting a letter of instruction for each agent and leave it with your estate planning documents, so they will have something to refer to when the time comes. While some families may stop at this step, it is essential for clarity and preparation.
Option 2: Hold A Family Meeting
A family meeting can reaffirm your love for your children and reinforce your desire for them to maintain their faith (if they are saved). Use this time to explain what will happen if you become incapacitated or die, allowing your children to ask questions and understand your plan.
Depending on your family’s dynamics, this meeting can be led by your or a trusted Attorney or financial advisor. If you are mentally sharp and have a strong relationship with your children, you might handle the discussion yourself. Otherwise, having a neutral third party lead the meeting can help manage any emotional responses and preserve family relationships.
It can be helpful to keep the discussion at a high level to avoid overwhelming details. The details can be reviewed with your agents separately.
Option 3: Write A Letter
A heartfelt letter can have a lasting impact. It’s a chance to express your love, share what you appreciate most about each child, outline the Gospel if needed, and explain the intent behind your estate plan. Even if you have a family meeting, a personal letter can be a meaningful keepsake and provide your children with a reference to your thoughts and feelings over time (as memories can get fuzzy over time).
Common Reasons Not To Discuss Your Estate Plan
Many individuals hesitate to discuss their estate plan for various reasons. Here are a few common concerns:
Managing Fear
A common fear is that your children may not respond positively to your plan. To mitigate this, consider having a trusted third party lead a family meeting. For some families, it may make more appropriate to not discuss the details while they are living. Instead, they can leave a personal letter for each child, allowing them to convey their intentions without facing a potential confrontation.
It Can Foster A Sense Of Entitlement
If your children are aware of a substantial inheritance, it could lead to feelings of entitlement or complacency. Although you may have tried to instill a stewardship mindset in them, such attitudes can still arise. Identifying and addressing these issues before you pass away provides an opportunity to guide your children toward a more Biblical perspective, or adjust your estate plan if necessary. It is crucial to be mindful of how inheriting wealth might affect your children and to offer support where needed.
Family Communication Issues
Sometimes, family members may not be in touch or may have strained relationships, making open communication challenging. Leaving a letter for an estranged child might not resolve all issues, but it’s a gesture that can potentially soften their heart or offer them some clarity. Do your best under the circumstances and leave the rest to God.
Poor Timing
There is no perfect moment to discuss your estate plan, but it’s best to do so before finalizing legal documents (allowing for any necessary changes). Also, avoid addressing these matters when someone is critically ill, as there are other more important things to discuss at that point. Having the discussion when there are no immediate medical concerns can facilitate a more open and relaxed dialogue. If a discussion isn’t possible, consider writing a letter to help your children process your wishes.
Final Thought
Discussing your estate plan with your children can be intimidating, but it is for their benefit. Clear communication can prevent misunderstandings and potential disputes, offering your family the gift of clarity. While you can’t control how others will react, you can ensure they understand your intentions. Plan carefully and communicate your wishes clearly.
