Most clients typically do not talk to their children about their inheritance.
Some don’t want to think or talk about dying. Others are uncomfortable talking with their kids about financial matters, or letting them know how much they will inherit out of fear it will curb their motivation. So when is the right time to talk about inheritance matters?
Two Important Times for Conversations on Inheritance
#1: When you first have children
Most parents never want to confront the question of who would be responsible for their children if they both were not around. Once you have children is a good time to have a discussion with your significant other and determine who the person or persons are you would want to be responsible for your kids. Once you have agreed on a guardian (and multiple back-up guardians), include those individuals in the conversation. You should ensure that they are comfortable with the responsibility.
Additionally, be sure to inform them where all assets, accounts, and relevant documentation is located. The proper estate planning documentation, such as trusts, can help make for a smoother transition should anything ever happen.
#2: When your children are adults
When you feel your children are mature enough to understand the conversation, you should have the discussion with them. Everyone’s situation is different, but you know your children best. Whether you have this conversation at 18 or 30 will depend on the individuals. But in most cases, one or more of your children is going to be in charge of administering the inheritance. All will likely be beneficiaries.
In order to avoid sibling rivalries and confrontations later, it’s best to have the conversation with them up front. No matter how the distributions are going to be made, or how the assets will be divided, let your children know there is a plan in place, why that plan was put in place, and the reasons behind certain decisions that were made.
How to Talk About Inheritances with Your Family: 3 Tips
#1: Be Open and Honest
Be sure to communicate with the people you have included in your estate plan, including your will executors, guardians, and trustees. Talk about the intentions and wishes you have for your estate. Give each person space to openly communicate their feelings as well.
#2: Have Estate Planning Conversations Early
While a health scare tends to be the time for many to begin this conversation, you should start talking about your estate plans earlier rather than later. This will give your family peace of mind and certainty — they will know what to expect if the unthinkable does happen. Additionally, as you update your estate plans, keep your trusted ones informed along the way.
#3: Create Instructions for Your Assets
In the event that you do unexpectedly pass away or become incapacitated, make it as easy as possible for your loved ones to access your plans and assets. Be sure to leave instructions and let your loved ones know where they can find your paperwork and other important documentation.