TALKING WITH YOUR CHILDREN ABOUT YOUR ESTATE PLAN

By Kirk R. Wilson, J.D., LL.M.

There are many reasons given by clients for not telling their adult children about their estate plan. Some parents feel their financial affairs are personal and should remain confidential. Others are concerned that telling their children what they will eventually inherit – especially if it is a significant sum – could negatively impact their children’s motivation to become productive members of society.
If parents are leaving more to one child than to the others, for example where one child has greater needs, they may be afraid this could upset their other children, and they would rather avoid an unpleasant conversation. This is also the case where parents are naming one child over the others as executor of their will or successor trustee of their living trust to handle the administration of their estate. In these situations, parents sometimes tell me that their children will find out soon enough – after their passing – at which time the parents won’t have to listen to any complaints.

All of these points have some validity, but there are also good – perhaps better – reasons in many cases for parents to let their children in on what to expect after they are gone. In the case of an unequal division of the estate, wouldn’t it be better for parents to explain their reason for leaving more to one child than to the others and to reaffirm that they love all of their children equally, so that this doesn’t come as a shock when the will is read? A surprised and disappointed child who learns that he or she is not receiving an equal share may be motivated to contest the will, which would be a family tragedy.
Sharing the broad outline of the estate plan and the parents’ reasons for it with the children in advance will in most cases diffuse the potential for disappointment, anger and suspicion when the time comes to implement the plan.
The same is true with regard to the parents’ desire to name one child ahead of the others as their executor or trustee. The reasons will vary. One child may live nearby while the others live far away. One child may have special expertise, such as being a lawyer, accountant, or investment advisor, which makes that child the logical choice. Some of the children may be too busy raising a family or pursuing a career to have the time needed to handle this assignment. Or, on the negative side, one child might be a spendthrift, or have drug or alcohol issues.
The reasons for selecting one child over the others are many, and it may be that none of the children are appropriate choices and that another family member or neutral party is the best option. But unless the parents’ reasons are honestly explained to their children, there is likely to be some resentment when this comes to light after it is too late for them to talk with mom and dad about it. In most cases it is much better to get this out in the open so that there are no unhappy surprises.
If a parent is concerned about taking away a child’s motivation to complete their education and to pursue a meaningful career by letting them know what they stand to inherit, wouldn’t it be better to talk honestly with that child about this and to start preparing the child to handle his or her inheritance prudently?
While it may be uncomfortable for parents to have these conversations with their children, this discomfort is a small price to pay for the potential future benefits that flow from having everyone on the same page. If parents feel they need support to have these conversations with their children, it may be possible to arrange a family meeting with the parents’ estate planning attorney, so that their counsel can facilitate this discussion and help explain the plan to the children.
Alternatively, if parents feel strongly that sharing the terms of their estate plan with their children while they are living is not a good idea, they should consider writing a letter to their children to be kept in a sealed envelope with their original estate planning documents that can be opened after they have both passed away. In this letter they can explain their reasons for their decisions, reaffirm their love for each of their children, assure them that these decisions were made in the best interest of the whole family, and ask them to accept and honor their wishes. Such a letter can go a very long way toward defusing any anger or disappointment the children might otherwise feel without such an explanation.

[The author is a Woodlands-based estate planning attorney at the firm of O’Donnell, Ferebee, Medley & Frazer, P.C. He is licensed to practice law in Texas and California, is a board-certified probate, estate planning and trust law specialist in California, and holds an advanced law degree (LL.M.) in taxation. He can be reached at (281)875-8200. The firm’s website is www.ofmflaw.com.]

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