Family Finances: Tips for Talking About Your Estate with Family

Everyone was a bit sunburned, windburned, and worn out from a long day on the beach. Such are the days—for our family at least—that bring us all together to touch base on where we are in life. 

As we crashed and relaxed around the living room, we teased our daughters that we had a hard time deciding which of them should make the financial-type decisions about our future and which we might prefer to entrust with the softer, perhaps more wrenching, health care issues. As they cast into that debate between the two of them, it opened an opportunity for my wife to share what our plans were for our estate. 

So, we were presented with a very natural moment—an opening—for us, the parents, to talk about our family finances Estate Plan to them. And it occurred to me—is that not the more natural way such discussions should occur? Should it not fall, after all, to the parents who have all the information to share that with their descendants? Downstream, if you will, rather than upstream? Why should the children have to awkwardly pry to see if “the folks” are ready to open up, or if—heaven forbid—they have some twists and surprises? As a parent and grandparent, I feel a natural, logical responsibility to share that information with the next generation. 

However it occurs—and whether it starts from children to parents or vice versa—maybe these are some ideas about how to get such a potentially awkward conversation started and to keep it moving: 

Seven Tips for Talking About Family Finances

1. Pick a calm moment when everyone seems to be getting along and feeling positive about the family. If the family is already in a heated, contentious discussion, save this for another day.
2. If the children are the ones starting the discussion rather than the parents, maybe mention that someone told them they (the children) should have a Will, so what’s that all about? Or maybe a story about a family whose situation was very messed up because the estate wasn’t figured out or discussed ahead of time.  
3. Don’t start with the money. Maybe start—as we were fortunate to do—with teasing about who in the family is the “tough guy” versus the softie or maybe has more experience at different kinds of situations. Are there nurses in the family? Attorneys? CPAs?
4. Stress that this is all about being organized so the family can avoid as many future hassles as possible. The parent’s estate plan—ideally designed—is intended to minimize the hassles, taxes, unpaid debts, hidden inter-family promises, probate, etc., that haunt an unplanned situation.
5. Focus on future health care decisions that likely will be needed for the parents. This, again, shifts the discussion away from How Much? and Who Gets What? to issues that hopefully everyone cares about. My parents went through assisted living, dementia, long-term care insurance, and Alzheimer’s disease—issues that all too many families face these days. 
6. If you work with a financial adviser experienced and qualified in these areas, and particularly in more financially complicated situations, ask the family if they would be willing to meet together so the adviser can explain, diagram, and answer questions about the financial and other aspects of the situation. 
7. Remember that what we write in our Wills may not actually control how some of our assets pass to our spouse and heirs, because IRAs, 401ks, TOD (transfer-on-death) bank accounts and investment accounts, and life insurance are all controlled by beneficiary designations. And a house may pass based on how the title on the deed is designated. So, overlaying what you own and how you own it alongside the Will provisions can be critical to understanding how your estate plan will actually work.      

It goes without saying that the more complicated your family situation, businesses, and assets, the more difficult and thus more easily avoidable these discussions can be. It may take several discussions, and in more complex situations, it is perhaps best done with each child separately rather than all together. 

Families are all wonderfully different, but finding a discussion that suits yours can help bring some organization and peace to an already difficult time. 

My best to yours!

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