One of the hardest things a parent deals with after they have created their estate plan is talking to their children about their plan. They usually struggle with talking to their kids about how much money they have and how much they plan on leaving behind. But not talking to them is doing a disservice to them and leaving them unprepared.
Consider this; the United States will witness the largest transfer of wealth from one generation to the next over the course of the next 20 years. It is estimated that the baby boomers will receive $12 trillion dollars when their parents pass and the following generation will receive an additional $30 trillion when the baby boomers pass.
The main concern that clients have about talking to their kids about their wealth and their estate plans is that their children will become lazy and potentially cease to be productive members of society. Parents fear their children may choose to simply rely on their future inheritance and waste their lives away.
Leaving your children in the dark and unprepared for receiving an inheritance typically hinders their ability to manage those funds in a productive manner. In fact, it often leads to them squandering their inheritance.
I always advocate to my clients that they should have a family meeting with all of their children. The purpose of this meeting should be to discuss what the children should expect when their parents pass away, as well as what steps they need to take. The discussion does not necessarily have to be about money and how much each child is going to receive, but it should be about what your values are, what to do with the opportunity they have been given, and how to be wise with the inheritance.
Many parents decide to assign unequal distributions to their children for a variety of reasons. Sometimes one child may have greater needs then another, or perhaps the parents have already loaned money to one of their children and seek to balance that out by giving them a lesser portion of the estate. Whatever the reason, if you chose to distribute your assets unequally to your children, we recommend you also talk to them individually to explain why you did this. Without understanding your reasons, they may assume that you loved them less or were unhappy with them. By lovingly informing them of the reasons for your decision, they will be able to understand and avoid hurt feelings and sibling rivalries.
If you have children that you believe will not be able to manage their inheritance wisely because they have drug problems, gambling issues, are spendthrifts, or a whole myriad of other reasons, we can create an estate plan that will protect that child from himself or herself. This will help ensure that the assets you have worked so hard for will be protected and used wisely for that child’s benefit.
To discover the many ways that an estate plan can help you and your loved ones, schedule a free consultation with one of our qualified estate planning attorneys today! Call 888.222.1328 to set your appointment.
Contributed by MH Arrowhead and Phoenix Estate Planning Attorney and Partner David T. Eastman
What the Attorneys of Morris Hall Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down. The attorneys also help those in Arizona and New Mexico to apply for and receive Medicaid assistance and Veterans Benefits. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.