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What To Tell Your Adult Kids When Planning Your Estate

older family talking to their kids about estate plan.
So you finished your estate plan.

You finalized a will, made sure beneficiaries are named on financial accounts, signed all other pertinent documents and picked an executor to carry out your wishes when you die.

You might have overlooked one consideration: whether you should share the details of your efforts with your adult children.

“This is a tricky one and definitely depends on the family,” said Kristi Sullivan, a certified financial planner and owner of Sullivan Financial Planning in Denver.

It’s a sentiment echoed by many advisors. Yet they also said there are certain parts of estate planning that should be shared — regardless of whether money is part of that discussion.

An estate’s value at the time of settlement varies widely: Most are worth between $50,000 and $250,000, according to a 2018 survey by EstateExec.com, an online software provider. About 11% are worth under $10,000 and 11% more than $1 million.

Family conflict, however, is common in many cases regardless of the estate’s value: More than 44% of survey respondents said it has happened in their family. In other words, even if you view your estate plan as tidy and definitive, it still could blindside your adult children when you’re gone.

“Do you want your bequests to children to be about resentment, whether toward each other or toward you?” said David Mendels, a CFP and director of planning at Creative Financial Concepts in New York.

The basics

In basic terms, “estate” just refers to everything you own when you die: your financial assets, real estate and possessions. An estate plan focuses on making sure those things end up where you want them to, as well as anticipating other end-of-life considerations.

If you die without a will — called dying intestate — the courts in your state will decide who gets what. That process is public and often messy if would-be heirs have competing priorities and conflicting notions of what is rightfully theirs.

However, not everything about an estate plan deals with money or other assets you’re leaving behind.

For example, it’s generally recommended that you assign power of attorney to a trusted person to handle your finances if you reach a point when you can no longer can. Same goes for medical decisions. Experts also say it’s wise to have a living will (also called an advance health-care directive), which outlines your wishes if you become incapacitated due to illness or injury (i.e., whether you want to be left on life support).

Source: https://www.cnbc.com/2020/11/09/how-much-shou.html

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