Key Estate Planning Tool: Family Meetings

While some may want to leave their net worth or the contents of their will or trust secretive until after their death in fear of causing family anxiety, quarrels or merely out of privacy, it may be a good idea to have a family meeting about your estate plan so your family:

  1. understands the goals of your estate plan;
  2. knows what to expect after your incapacity or death so they act accordingly during your life and after your death; and,
  3. avoids interfamily fights and litigation from misunderstandings after your incapacity or death that could delay the administration and squander a large portion of your estate.

Discuss Your Overall Goals:

It is important to let your family understand your overall goals. This is even more warranted if your plan is not to give everything to your family or anything to a certain family member. You may have a plan of providing above and beyond for your family or you may want to limit their inheritance to a multiple of their highest W-2 to motivate hard working children or you may desire to simply provide a fund for your children for the key essentials of life such as education and health care costs or certain other family emergencies or you may even want to give all or a part of your assets to a charity to help a cause you have always believed in versus to your children. It is important that your children understand your goals, intentions and objectives so they do not feel cheated and feel a sense of closure with your desired goals.

Further, children may have their own input. For instance, if one child receives more than another child or one child is named executor, there may be resentment. It is good to let your children know why decisions were made or you can adjust your estate plan accordingly after hearing their opinion. For instance, two children could be financially well off while the third child is a high school teacher, volunteers for a humanitarian organization, is a police officer or a firefighter, or a member of the military. Extra funds to this third child may help reward him/her for his/her choice in career that is not as financially rewarding, but important for society and you can clarify this among your children. Also, if a certain child has a substantial estate himself/herself, he/she may tell you to give his/her share to his/her siblings, directly to his/her children, or to a charity. Discussing your goals allow your children understand the decisions you made and allows you, if warranted, to possibly rework your estate plan so your plan is divided the best possible way.

Knowing What to Expect:

In addition, a family meeting helps your children know what to expect after your death and how to act accordingly. For instance, if your child expects a large inheritance, but you will only give him/her enough for key life necessities because you believe it is important that they support himself/herself, a family meeting provides your children with knowledge so they do not spend frivolously relying on a large inheritance and end up without a retirement cushion.

Let your children know you will pay for your grandchildren’s education if you believe it is important that they go to the best schools or receive a private school education. This will enable your children not to worry about how to pay for the multiple six figure education expenses for two or three of your grandchildren. If you value family time, let your children know it is your opinion that it is important it is to spend time on family vacations, sporting events together, family dinners/barbeques, or to purchase a summer home to focus on family time together, and their retirement will be covered at your death.

Also, it is important to let them know what to expect in terms of how any inheritance should be used. For instance if you make it clear you are providing assets to a child for financial security for retirement, for a new home, for a new vacation home, to pay off debt, for grandchildren’s college education expenses,… then they are more likely to use such funds for the intended purpose and not squander it all on a two year shopping or worldwide vacation spree. Dollar numbers are not necessary, but a general idea of what you expect from them with the inheritance helps.

Easing into Estate Administration:

The same way a life guard trains to know what to do when someone is drowning at the beach, let your children know what to do at your death or incapacity. Let them know who will represent you as your executor, trustee, and health care surrogate. Let them know where your original estate planning documents are located and that they are in a safe location (where a jealous child will not destroy or thwart your plan. For example, in a safe at your home is not a good choice, but in a safety deposit box, attorney’s office or with a neutral third party that can be trusted with such documents). Let them know where your financial documents that they will have to gather at your death are located so they do not go on a wild goose chase searching every bank for your 5 bank accounts, 20 bearer bonds and 3 safety deposit boxes. Let them know the professionals (attorney, accountant, and investment advisor) you intend to handle probate, your estate/trust administration, tax returns, and other estate administration tasks. You may even let them know where to hold your funeral and finally put you to rest so you do not have fights among children over these issues. This helps smooth the process. Your children will know what you expect and can administer your estate without any hiccups in an already trying and emotional time.

Avoid Fights After Your Death:

Last, by discussing your estate plan with your family it may avoid fights and misunderstandings after your death when you are not able to speak for yourself. By being clear with your family upfront, it allows them to ask the questions they cannot ask after your death and know what to expect. It removes some of the thoughts that certain children were cheated, dealt with unfairly, or dealt with in a manner not intended by you. Also, it removes some of the thought that certain children exerted under influence or duress over you. It allows you to go back and clear up any potential ambiguities and misunderstandings your children may have or what assets and mementos are important to them. For instance, you may find out who should receive your wife’s engagement ring, who should receive your’57 Chevy, who should receive your extensive record or sports memorabilia collection, or who should receive the fancy china you have used every Thanksgiving during their entire lifetime and that has been passed down for three generations. Quarrels over who should receive mom’s engagement ring or how long a child living at your home as of your death should stay in your house rent free can squander a large portion of your estate, cause delays, unnecessary litigation expenses and lifelong quarrels. By clearing up your expectations, questions, and going back to rework details of your will and estate plan, allows you to add clarity to your estate plan and ensure everyone feels they received their fair share or at least what you desired to give them.

An experienced estate planning attorney should be consulted for all questions or concerns about finalizing your estate plan to ensure that it fits your needs.