MomsGetReal Guest Contributor Mary Harmon
No matter how diligent you have been in planning your estate and getting your affairs in order, most parents fall short in one important area: being honest and thorough with telling your kids. It’s not always because it’s uncomfortable for them to talk about when you’re no longer around. In many families, it can simply be the strain of a financial discussion that creates drama and bad blood long before a parent is even elderly or ill. According to the New York Times, children will inherit $30 trillion in the next 30 years, and yet there is a 70 percent failure rate when it comes to transferring family wealth. If you’re worried that your children will squander their inheritance, you may not be wrong. But the best thing you can do for them is advise them early on.
Treating Your Children Equally
Though disinheritance and unequal inheritance is common, the most responsible thing to do for your family is almost always to give children the same amount of money as much as possible. In every family, one sibling will be more responsible than others. Some might be wealthier than others. Some might be ill or disabled. If you need to provide for a disabled child to have access to care after you are gone, explain that to your other children as soon as it’s decided – it’s likely they will completely understand. If you’re worried about one child being more irresponsible with money than the others, leave them trust funds and appoint a trustee who will exercise sound judgment. Tell your kids what you’re doing and why so that it isn’t a surprise later on.
Use Financial Advisors
When you’re meeting with your kids to discuss the provisions of your will, it’s important to have the experts present. As logical as your decisions might be, the children can respond with resentment when the information comes with you. Your attorney, financial planner, or accountant can encourage an impartial environment, and they can also advise your children on investing their inheritance and ensuring a successful transfer of wealth. An expert is more likely to present positive solutions to toxic family issues that can arise because they have no vested interest in playing favorites.
Talk About Personal Items
Even if your children understand who is getting what financially, you need to have an important conversation about family heirlooms and personal items. Jewelry, china, and artwork can be of special interest to your children, but so are smaller items that aren’t necessarily worth money. This can be an awkward thing to discuss, especially for you, because you’re asking them for a clear idea of how they will divide up your belongings when you die. Make sure they understand that it is not greedy, morbid, or inappropriate to have this conversation, and that you would feel better knowing material things won’t cause serious family fights after you are gone. Family inheritance disputes over money, property, and other items are extremely common and often undermine the entire purpose of estate planning.
If possible, allow your kids to hear the rough draft of your will and pose any questions they might have. The language of your will should be strong and make clear how much you love them. If all else fails, stress to them that you have the legal right to distribute your wealth as you see fit and that challenges to wills almost always fail. Understanding their financial future is the best thing they can do for themselves, and it’s the best thing they can do to honor you, too.
Author Mary Harmon is a full-time blogger for www.lastwillandtestament.us where you’ll find more about the ins and outs of inheritance.