Some families don’t talk about money, while others don’t talk about death. Smart families talk about both, because they recognize that there is a business component of their lives that needs to be addressed.
Widely regarded as one of the world’s greatest commanders, Napoleon Bonaparte believed that battles were won or lost depending upon how well the advance planning was done. The same is true, says MarketWatch in the article “Breaking the taboo: How to prepare your heirs for your death,” when it comes to planning for retirement, aging and death.
This is a critical lesson, when planning for your own death and the related issue of transitioning assets to your family. The majority of estates lose assets—as well as peace within the family—after a transition. That’s because the heirs were unprepared, they didn’t trust each other, and communications fell apart.
This preparation should involve making heirs aware of the location of all-important estate planning documents and financial assets. They should also have the contact information of your financial professionals and attorney. They should understand how the parents want to deal with end of life and incapacity issues. These are some important questions that will help you see if your heirs are prepared:
- Do your children (and their spouses, if any) know your estate plan?
- Is there a plan to provide certain information sooner and other information at a later time?
- Has your family read your will and other estate planning documents?
- Does your family know the family’s net worth?
- Would your heirs know how to communicate with your attorney, accountant, insurance advisers and investment advisor?
Family battles can easily happen when members don’t believe they’ve been given their fair share and weren’t part of the process. Although it’s important to treat family wealth as a private matter, it should not be private within the family. Good communication between parents and heirs can prevent many issues.
The success of your estate plan will depend upon how well you have prepared family members for its eventual execution. Everyone needs to know who will be responsible for what, and what your overall goals are. A successful estate plan is about far more than disposing of assets. It’s about preparing the family to transfer its values to the next generation, communicating the critical information, and ensuring that the family continues to hold together, when a senior member passes away.
Reference: MarketWatch (March 7, 2019) “Breaking the taboo: How to prepare your heirs for your death”