Talking to your adult children about your estate plan and the state of your finances can be challenging. Especially so for parents who will unevenly distribute their wealth. Some parents feel embarrassed by what they have—or don’t have. Others are afraid to share their inheritance wishes because they don’t want their children to count on or feel entitled to the gift, in case the estate plan changes in the coming years.
A well-crafted estate plan requires thoughtful consideration and communication. If you have a family member who is going to act as your trustee or power of attorney, they need to have time to understand your wishes and desires. They may have questions about how best to carry out those wishes. They also need to know in advance the expectations surrounding their role in the plan so they can be prepared to execute those responsibilities.
Okay, that all sounds good. But how do I actually bring this up with my children? What should we talk about?
First, you’ll want to decide who should be involved in the meeting. Do you want your kids’ spouses in the room? Would it be helpful to have your Cook Wealth advisor there too? Depending on the complexity of your plan, you might want an expert in the room to answer questions or make changes to your plan as you talk it through with your family.
When you sit down to talk, start with intentions, not specifics
I also recommend focusing on your plan and the intentionality behind your decisions before you talk about the actual dollar amount of your expected inheritance gift. I find that it’s easy to get hung up on the numbers, especially if your children aren’t particularly aware of your situation already. But when you explain why you want to give a percentage to a certain charity, or why your plan isn’t evenly divided among siblings, it’s easier to get through that conversation without dollars and cents attached.
Speaking of charities, including charitable giving in an estate plan is excellent (and my wife and I personally have this built into our estate plan) but helping your family understand the why behind that charitable purpose is critical. Especially if you’re planning on giving a considerable portion of your estate away. If you have a very specific charity in mind, be sure to share that with your family. If it’s a particular cause that matters to you, make that clear. By understanding what is important to you and why, it allows whoever is executing your estate plan to ensure your wishes are truly being met.
Be prepared – a moment of awkwardness is normal!
It’s normal to worry that discussing your estate plan with your family will cause your kids to start counting that money as “theirs”, or that this conversation will cause some temporary awkwardness in the family. Money can be uncomfortable to talk about! It’s typically considered a private matter, and sometimes there can be family dynamics that lead to drama whenever financial resources are brought up. I’m certainly not saying it’s going to be easy, but this conversation is so important for your family. The benefits to having your family on the same page when it comes to your estate plan strongly outweigh the potential concerns.
Plan to be patient, too. If your plan comes as a surprise to your kids, take a break from the conversation and come back again later, once they’ve had time to chew on it. You may also decide to make changes to your plan as your children raise questions or concerns, so remember that it’s okay to say we don’t know yet and come back to it later.
Our advice is to bring your advisor into this conversation
You don’t have to include your advisor in every subsequent estate plan talk, but strongly consider doing so at least for the first discussion. I generally like to coach people to bring their financial advisor to the table and have them help present the plan, along with the parents. The advisor will have a stronger understanding of the technical details and how those will impact the children directly. The parents can then focus on the more emotional side of the conversation (like your legacy and intent for the inheritance) while the advisor can handle the communication of information and process.
Talking finances will get easier
The good news is, once you’ve had the “money talk” with your children, it’s much easier to have further conversations moving forward. Your family will benefit from having their questions and concerns addressed now, and not in the midst of a major health event. And you can ensure your true wishes are carried out as you hoped they would be.
Do you have a quick question about estate planning? I’d love to help. Grab a 15-minute spot on my calendar or send me a message below. I look forward to connecting with you soon!