How to Talk About Your Estate Plan With Your Heirs

It’s very hard to decide how much and when to tell children and other heirs about your estate plans. Take into account your family circumstances, but consider the whole scenario.

Your hesitancy may come from revealing your family’s expected inheritances. A survey by UBS of nearly 3,000 investors showed that just 54 percent had discussed estate plans with heirs, while only 34 percent mentioned specific dollar figures.

The number one fear in disclosing this information is that it’s a disincentive to work hard and save when you discover you’re going to be receiving a substantial legacy in the future, parents explain. There’s the “opening Pandora’s box” aspect, too — if you plan to leave unequal inheritances, there will be resentment and that will lead to trouble among family members. Surprisingly, even adult children may feel unloved if they receive less money than another heir.

Keeping the peace is understandably prized. Other complications arise from blended families and children from a prior marriage. However, despite all the rationales to keep silent, there are many good reasons to have the estate plan talk.

Regarding the squabbling — isn’t it better to tell everyone what to expect in the present, while you’re still alive and can explain why you’ve made these decisions? This way, you have a chance to smooth things over. You can explain why you’ve chosen to give more of an inheritance to your child who works for a nonprofit than to your richer banker son.

The UBS survey demonstrated that heirs who aren’t given advance notice about inheritance arrangements were more than twice as likely to be unhappy about them afterward.

Consider, too, that once the cat is out of the bag, you’ve made it easier for your family to know what assets there are and where they’re located. One of the most stressful consequences of a sudden death is leaving an added problem to your family already suffering grief — now they have to search for money. If you’ve already discussed your assets and your plan, everyone will know what to expect and can concentrate on how much they’re going to miss you.

Besides, by not discussing your estate plans with your heirs, you could be missing out on’ their good ideas. For example, if you have a vacation home, perhaps your children will come up with a plan that does a better job of protecting the home and suiting their future needs than what you had conceived.

Discussing your plan allows better coordination with your children’s own estate plans. Maybe your whole family can save taxes if you give more assets directly to your grandchildren or create trusts for your children instead of leaving them assets outright. Openness and honesty is still the best way.

We are available to help you not only set up your estate plan, but to discuss it with your family.