Two- Cents Plain Speak With Heirs

Most families are fairly open with their children about how much money they have and what the kids can expect when they pass on. It’s like Judy gets the piano and Johnny the old Charger in the backyard. Other families would give WikiLeaks a run for their money in keeping financial secrets until after they died.

Ages ago I visited my buddy’s grandmother who lived in a small home on the edge of Detroit. Sitting in her cluttered living room I picked up one of the dozens of knick-knacks she had and noticed glued on the bottom there was a white label with someone’s name written on it. When I later asked my buddy what it was all about he said it was his granny’s way to make sure everyone in the family got something when she died. It was her concept of a Will. Unless someone started ripping off labels there was no question who was going to get what.

While I am of the school that believes some things in the family are best left as a holiday surprise the estate planning process should not be one of them. Once someone has created a Will, possibly a Trust, a Living Will, health care power of attorney, financial power of attorney and have named a personal representative; those involved should know what’s- what before the time comes. Nothing, I have found, is more disruptive after a parent passes on is the beneficiary in-fighting for money and possessions.

Contrary what some parents think most kids grow up to be responsible adults and deserve to be treated as such.

One surprise any ill prepared child could do without would be getting a phone call from a stranger at a hospital saying a parent is gravely ill and they need to know what treatments to or not provide. Preparation is key to ensure what you want is what you get and everyone knows their role.

Here are a few ideas to communicate with those that will inherit your assets:

1. Invite everyone involved to a breakfast meeting at the house to talk about their inheritance. Don’t hold it until everyone is available.  Don’t do it one on one or you’ll only breed mistrust.
2. Lay out your estate plan the way you developed it and explain why.
3. Make sure there is a list of bank accounts, insurance policies, brokers, financial advisors, lawyer and accountant for everyone.
4. Let everyone know where you are financially and physically. You do not have to be exact but kids should know if you are close to being destitute or comfortable.
5. Explain who you have picked as health care power of attorney, financial power of attorney and personal representative:and what their duties will be.  Allow discussion and those that desire can opt out.
6. State how you have divided up your assets and why. Again I suggest percentages and not exact numbers since that will change.
7. If your state has a ‘no contest clause’ make sure you write that into your plan and tell the kids.
8. Ask the kids about certain ‘keepsakes’ and if they have a preference who should get what.
9. Set up a meeting with your financial advisor and the person you’ve chosen as having financial power of attorney. These two people may be working together upon your behalf for a very long time and you want them to be on the same page.
10. If this is your second or third marriage sitting with the kids from all unions is a great idea to ensure no one is forgotten, given preferential treatment or gets their nose bent out of shape.

Every family dynamic is different and should be treated as such. All questions on estate planning and your estate should be handled with your attorney and this is merely an outline of ideas that is meant to provide a broad working outline.

Questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.