Planning Your Family’s Future

In my role as a financial planner, I frequently work with clients who feel unready or uncomfortable when it comes to family estate planning. In their minds, they know it’s the right thing to do and that it needs to be done – but emotionally, it can be a touchy issue because it involves your loved ones. This is especially true with more complex family situations, such as when clients have several children, when there are multiple large assets such as businesses or second homes involved, or when the client has had more than one spouse. Oftentimes, it can be all of these factors combined.

With all of these complexities, parents and children are often reluctant to bring up the topic of family estate planning. Parents sometimes feel:

• They don’t want to “ruin” their children’s motivation and drive.
• They don’t want children to know about certain aspects of their finances.
• They are worried about being judged by their kids.
• They are worried about losing control of their assets to the children.
• They are worried about family relationships when there is an unequal distribution of assets.
• They hold certain cultural beliefs or superstitions (“It’s bad luck to talk about such things!”).

On the other hand, children may feel:

• They don’t want to think about parents aging/dying.
• They are worried about finding out what their parents think of them.
• They are worried about being perceived as “greedy” or being a “vulture.”
• They are worried about relationships with siblings and the surviving parent or stepparent.

All of these concerns are valid and should not be ignored, but family estate planning must be done despite these emotional headwinds. 

As a best practice, I generally recommend to my clients to include at least the spouse and adult children in the creation of a family estate plan, assuming that they are in good standing and that you are intending to leave them assets. After all, the best way to ensure that everyone is happy with the plan is to work with them on its creation. Including family members also helps ensure that a legacy will have the greatest impact.

One way to start the conversation with your family is to not talk in terms of life and death, but instead about the “vision” for the family. Rather than getting into dollars and cents, talk about goals: what we want the future (“our legacy”) to mean, the story of what we’ve learned and want to pass down, and the vision we have for the family’s future. Here, we can include everyone’s input into this vision. Clients should see it as a positive conversation about future hopes and dreams for loved ones instead of as an awkward review of accounts and assets.

From this collective family vision, the legacy that is crafted should not be about how much each person gets. It should be about what we want to accomplish for them. The estate plan is how we want to be perceived and remembered by our loved ones. When it’s complete, clients should feel satisfied that they’ve done the right thing and the most that they can.

A collective family vision is especially important if parents want to focus on equity rather than equality. There can be many rational reasons for parents to want unequal distributions among the children. For example, an asset might be worth less in the short term but more in the long term, or perhaps one child has a situation that necessitates a larger share to help with financial security. How we communicate shapes how we’d like the wealth we leave to be used or not used and clarifies the rationale behind an unequal distribution.

By telling our loved ones what’s important to us, we can alleviate potential family misunderstandings about our intentions and can mitigate conflicts amongst our heirs. Without clear and open communication of values and family mission, we increase the likelihood of negative feelings rather than gratitude in our heirs, risking situations like this case where a well-meaning retired physician watched his family descend into chaos and conflict as they fought over his assets in his final years.

Another important consideration in creating a family estate plan is including details on the process itself. When the time comes and your family needs to deal with your affairs, they should know how things are set up, the first steps to take, and the people to talk to. This helps take out the mystery of what they need to do in the aftermath and reduces chaos and stress at a time when they might be overwhelmed with grief.

With the help of an experienced financial planner, the creation of an estate plan should not be difficult. Depending on your individual situation, your specific estate plan can be complicated to structure and to execute. However, even if you have a complicated situation, an experienced financial planner working with an estate attorney can analyze the problems and all their moving parts, solving them systematically by drawing up legal documents that outline the estate plan. While not easy, there are regulations and best practices which address each component of an estate planning. With the right experts, you can create the plan that will fit your unique situation.

With a robust and collaboratively created family estate plan, you can be secure in your golden years knowing that your loved ones know your intent and vision and will be taken care of.