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Difficult Discussions
Have
you ever noticed that some discussions are easier to initiate than other
discussions? Interestingly, some of the most difficult discussions are
with members of our own family. Perhaps you can recall a few important
discussions you have had with your parents, your spouse or your
children. Some of the topics for discussion can be rather embarrassing
to initiate…by either party.
This article
will review one topic that every family needs to discuss sooner, rather
than later. So, what is this topic? It is your Life & Estate Plan.
The Challenge
Family members seem to avoid discussions
about their personal wealth, whether it is substantial or modest. That
said, have you had a frank discussion with your family members about
your wealth and your eventual post-mortem plans for it after you are
gone? For example: If you have adult children, do they understand the how
much do I inherit, the when is it distributed to me and the why are you treating me differently than my siblings issues regarding
their inheritance? If they do not understand now, then you might want to
avoid any misunderstandings later.
A
recent survey, conducted by the AARP/Scudder Investment Program, found
that the failure to have this difficult discussion could trigger family
fall-outs in the future. The survey of Americans age 50 and over
discovered that 20% of the respondents experienced family fights over
inheritance issues. However, of the respondents reporting no conflicts,
63% said they had known what to expect in advance and 82% of them
believed they were treated fairly.
These
survey results, together with abundant anecdotal evidence, clearly
underscore the benefit of meeting the challenge to discuss difficult
inheritance issues with your loved ones. Nevertheless, you should
address other related issues to avoid unexpected problems.
Incapacity Fiduciaries
As part of your difficult discussions, be sure to address your plans for
avoiding an expensive and embarrassing court process in the event of
your incapacity. Let your family know who will be making your personal,
health care and financial decisions when you cannot, due to an injury or
illness. Will it be one or more family members, third-party
professionals, or maybe a combination of the two? While you are at it,
be sure to discuss the game plan to handle your potential Long-Term Care
needs, including how you plan to pay for it!
Post-Mortem Fiduciaries
The reality of death can be emotionally and even physically traumatic
for the loved ones you leave behind. Even so, many financial and
non-financial matters must be resolved promptly and correctly. Final
expenses, bills and taxes will not wait to be paid.
Your family
should know today whom the go-to person or institution would be when the
time comes. Do they? This will eliminate any unnecessary surprise and
hurt feelings. In addition, such advance notice will give your loved
ones time to become acquainted with the post-mortem fiduciaries (e.g.
personal representatives and trustees) you have selected, especially if
they are third party professionals. Similarly, any non-professionals you
may have appointed will have time to prepare for their future duties.
The Treasure Hunt
Were you incapacitated (or worse) today, who would know where you keep
all of your important financial and legal papers? Have you created an
inventory of your assets? Have reviewed and recorded the ownership
arrangements, as well as the beneficiary designations, regarding these
assets? Are the titles and designations current? Will your final legacy
to your family include an unpleasant Treasure Hunt through your various
papers and effects? To make matters worse, how will they know when the
Treasure Hunt is completed?
A little bit
of time identifying, organizing, valuing and updating your asset
inventory now will pay big dividends when your incapacity or post-mortem
fiduciaries assume their responsibilities. [Note: During an asset
inventory, more that one person has discovered that an ex-spouse is
still an unintended co-owner or beneficiary of their assets.]
Conclusion
Like most things in life, prior planning is the key to success. However,
when it comes to your Life & Estate Plans, the proper planning and
open communication today are essential for family harmony later.
This
publication does not constitute legal, accounting or other professional
advice. Although it is intended to be accurate, neither the publisher
nor any other party assumes liability for loss or damage due to reliance
on this material.
Copyright © 2004 by Integrity Marketing
Solutions. All rights reserved.
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