Discussing Your Estate Plan With Family

How much of your estate plan should your family know about?

Making your estate plans known can sometimes be helpful, but in the end, what you choose to disclose is purely a matter of personal choice.

Why talk with heirs?

Explaining your intentions can help to reduce the likelihood of future tensions, or even litigation.

The scene’s been in countless movies: The deceased’s family is gathered, tissues in hand, for the reading of the will. You can feel the tension as everyone awaits finally finding out what untold riches will be heading their way.

Does this ever happen in real life? Almost certainly not. But it does raise the question: Should you keep your estate plans secret from family members? Although it may make for good (if clichéd) cinema, it’s not right for every situation.

Most people don’t want to share the exact amount children can expect to inherit. But if, for example, your goal is to assure the continuation of a family business, there are strong business and family reasons why the next generation of owners and managers should know what plans you’ve made.

If you have children from a prior marriage, it could be wise to have conversations with your spouse, and with children, about your intentions and what they should expect. Even if you don’t provide full details or exact monetary amounts, explaining your intentions can help to reduce the likelihood of future tensions, or even litigation.

Similarly, sharing intentions, plans, and information can sometimes be a good approach when you are planning to treat beneficiaries differently. For example, you might leave one adult child his or her inheritance outright and put another’s into a trust. In cases like these, it can be helpful to say, “I did this to protect you” or “I felt strongly that it was in your best interest.”

Whether or not you decide to discuss plans with your family, it’s important that your executor or successor trustee know who your lawyer, financial advisor, banker, and other advisors are—and where to find your important financial information and documents.

Proceed with care

Ultimately the decisions you make about your estate are yours alone.

Rather than discussing estate plans in a family meeting, you may be better off doing it in a series of one-on-one conversations. Regardless of the approach you choose, remember that revealing your intentions could spark controversy, so talk to your lawyer or someone who has experience in administering trusts before you move forward. Also, consider reaching out to an experienced counselor who can help you navigate through complex family and emotional issues.

Talking can have a fringe benefit

Talking about your estate plans can have another potential benefit: It provides a logical opening to encourage your adult children to make plans for their estate.

Because most people think estate planning is all about death and inheritance, it’s easy to put it off. This line of thinking has two issues:

  • Estate planning is about more than death. It’s also about controlling what happens to your assets if you can’t speak for yourself, which can result from a sudden illness or accident.
  • The unexpected can happen at any time. We all know life can be unpredictable. The unthinkable can happen without warning. If your children have children of their own, it’s especially important for your children to make arrangements for your grandchildren’s financial, emotional, and physical care if anything should happen to your children.

For these reasons, and others, it is always risky to procrastinate when it comes to estate planning. To help your children get started sooner rather than later, consider introducing them to the team that helped create your estate plan, such as your attorney, Financial Advisor, and CPA.

Next steps

  • Contact a Financial Advisor for referrals to local estate planning attorneys.
  • Give the matter serious thought before you decide to discuss your estate plans with family.
  • Consider consulting your attorney for advice on what to, and not to, talk about with family.
  • Prepare yourself for potential conflicts that may arise as a result.

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Wells Fargo Advisors and its affiliates do not provide tax or legal advice. Please consult with your tax and/or legal advisors before taking any action that may have tax and/or legal consequences.