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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 than 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.
Copyright © 2005 Integrity Marketing
Solutions. All rights reserved. Some artwork provided under license
agreement. 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.
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