How To Talk To Your Children About Your Estate Plan

At Choi Law Firm, we believe in the utmost importance of having an updated and effective estate plan. Yet, one often overlooked but crucial aspect of estate planning is communicating your plan to your loved ones, especially your children. Discussing your estate plan openly and honestly with your children goes a long way towards preventing misunderstandings, confusions, and conflicts. Today, we will cover some essential tips for talking to your children about your estate plan.

Don’t Wait

You do not need to wait until you are elderly or ill to start a discussion of your estate plan and end of life wishes. In fact, it may be ideal to engage your children on this topic when they are young adults in their 20s and 30s. During this time, they are usually gaining financial literacy and independence, and they are usually mature enough to appreciate the details and reasoning behind your decisions. Further, it is important that your children know what to do if something happens to you. Talking about these issues when you and your children are younger helps establish the foundation for expectations relating to the future of your estate.

Explain Your Decisions

Estate planning can be a complex and unfamiliar topic to many, especially younger individuals. Take the time to educate your children about the various components of your estate plan, such as your will, trust, and powers of attorney. By explaining why you’ve chosen these documents and how they work together, you provide clarity and transparency. Once you’ve discussed the documents themselves, delve into the details of your plan. While most families choose to tell their children about the general distribution percentages of their estate, others prefer to keep these terms private during life. Regardless of the specifics you choose to share, it is always advisable to inform your children of important features of your plan. These may include specific bequests of money or property, sub-trusts for children and grandchildren, or noteworthy charitable contributions. Openly sharing the way you’ve chosen to divide your estate helps prevent surprising or perhaps shocking your children during difficult times. 

Discuss Roles and Responsibilities

It is common to designate children for important roles in your estate planning documents. If your children are your executors, trustees, guardians, healthcare agents, and financial agents, it is vital for them to fully grasp their responsibilities. You should clearly communicate your expectations and ensure that they are comfortable taking on these roles. For instance, you might appoint your daughter as the trustee of a trust for your son’s child in case he’s no longer alive when you pass away. In such a scenario, it becomes imperative for your children to understand that they may become stewards of their nieces’ and nephews’ finances. By discussing roles and responsibilities in detail, you prevent potential misunderstandings and disagreements in the future. Additionally, explaining why you’ve chosen one child over another for specific roles can preempt any potential family clashes.

Update Them Regularly

As life changes and your estate plan evolves, it is important to keep those closest to you apprised of your current plan. Estate plans are not static documents; they evolve over time as your circumstances change or new assets are acquired. You may consider establishing a schedule for regular updates regarding your estate plan. This can be in the form of an annual “family meeting” or can occur naturally as significant life events occur. When everyone is aware of your current state of affairs, there is significantly less confusion and uncertainty around your ultimate wishes and desires. 

Emphasize the Importance of Their Own Estate Planning

Talking about your estate plan is a great way to urge your children to start their own estate planning journey. Emphasize the importance of creating an estate plan, regardless of age or wealth. Most importantly, explain why you chose to create an estate plan. Without a clear plan in place, your children’s and grandchildren’s inheritance may be vulnerable to creditors, ex-spouses, or other unforeseen circumstances. If your children pass away with no estate plan after inheriting your assets, their estate will be subject to state intestacy laws, leaving the state to decide how the assets are distributed. Encouraging your children to create their own estate plan is a responsible step towards securing their future and creating generational wealth and prosperity.

Conclusion

Engaging in candid, in-depth conversations with your children about your estate plan helps ensure harmony both now and after you are gone. While these talks can be difficult initially, being transparent about your intentions, documents and decisions is an incredibly valuable gift to your loved ones. With open communication and education, you can gain peace of mind knowing you have responsibly planned for your family’s future.