A Difficult Conversation
If you are like most people, you have probably noticed that some of the most difficult discussions you ever have are those with members of your own family. One of those very difficult discussions with family involves Estate Planning – Wills, Trusts, Advance Directives, and other end-of-life issues. But this is an area of great importance that should be discussed sooner, rather than later. Procrastinating, “beating around the bush,” or simply doing nothing about it will almost certainly cost you and your family time, money, worry, added problems, and, quite possibly, hurt feelings and ruptured relationships in the long run.
A Challenge
Let me challenge you to have a frank discussion with your family members about your assets and your eventual plans for them after you are gone. For some reason, family members seem to avoid discussions about their belongings, whether those belongings are substantial or modest.
Not doing your homework and not getting the help you need in this technical, legal area can be devastating to family members, not only monetarily, but also to their relationships. For example, if you have adult children, do you and they understand how much they may inherit, when the inheritance may be distributed to them, and why they may be treated differently from their siblings? If your children do not understand now, then how will you prevent misunderstandings among them after you are gone? Failure to have this difficult discussion could easily trigger family fall-outs in the future.
Did you realize that about one in five families experience fights over inheritance issues? However, in families who know what to expect, the vast majority of family members feel that they have been treated fairly when the time comes. Oh, the power of communication and the peace that comes with understanding!
Incapacity Issues
Be advised, a discussion about death and how assets will be handled is not the only discussion that needs to be held now. It is just as important to address your plans for avoiding an expensive and embarrassing court process (guardianship or conservatorship) in the event of your incapacity. Let your family know who will be making your personal, health-care, and financial decisions when you cannot, whether your incapacity is due to an injury or illness. Possibilities include naming one or more family members, third-party professionals, or a combination of both. Be sure not to forget to discuss the plan for handling your potential long-term care needs, including how they will be paid for!
Post-Mortem Considerations
The reality of death is often emotionally (and even physically) traumatic for the family members left behind. At that same time, many financial and non-financial matters must be decided upon and resolved promptly and appropriately. Final arrangements must be made, numerous expenses, bills and taxes must be paid, and a significant transitional process is a daily ongoing event for those left behind. Your family should plan for and know who will be named and authorized to make which decisions and carry out which responsibilities in the event of your incapacity or death. Only if everyone knows the game plan will many unnecessary surprises and hurt feelings be avoided. If you have chosen a professional or an institution to act as fiduciary (Executor, Trustee, Guardian, etc.), then advance communication and understanding can even give your loved ones time to become acquainted with these fiduciaries. If non-professionals are named as fiduciaries (for example, family members), knowing in advance will give them time to prepare for their future duties.
Avoid a Treasure Hunt
If you became incapacitated (or worse) today, who would know where you keep all of your important financial and legal papers? Have you created an inventory of your assets? Have you reviewed and recorded ownership information, beneficiary designations, and other important facts concerning your assets? Are titles to accounts and assets, as well as beneficiary designations, current? Will your family have to undertake an unpleasant “treasure hunt” through your various papers and possessions to find the information they need? And how will they know when the treasure hunt has been completed?
A little bit of time invested now to identify, organize, value and update your asset inventory, title to assets, and beneficiary designations will pay big dividends to your family members should you become incapacitated or die.
Conclusion
Like most things in life, prior planning is the key to success in this area. When it comes to your estate plan, proper planning and open communication today are essential to preserve assets and family harmony in the future.
DISCLAIMER: This article provides general coverage of its subject area. It is provided free, with the understanding that the author, publisher and publication do not intend this article to be viewed as rendering legal advice or service. If legal advice is sought or required, the services of a competent professional should be sought. The author and the publisher shall not be responsible for any damages resulting from any error, inaccuracy or omission contained in this publication.)