People in California may have seen a recent editorial article in the New York Times about the state of familial relationships and the difficulty of starting conversations about estate planning. Talking about anything related to death can be difficult and uncomfortable, but when it comes to financial planning for families and future heirs, not having the conversation can create a much more uncomfortable, even dangerous, situation down the road.
A recent study showed that most people who participated have a will, but when it comes to other common estate planning essentials, the numbers were less encouraging. While more than 4 out of 5 respondents have at least a will, less than half of all respondents have actually talked about inheritance matters in detail with their children. Of course having a will is an essential and necessary step for people who want asset protection and security for their heirs, but estate planning is a two-way street. Potential beneficiaries need to know what, when and how they stand to inherit property or assets from a parent or other benefactor in order to plan their financial lives accordingly.
Among the primary reasons cited for not talking about inheritance with children include concerns that the heirs might fight with other siblings about inheritance, or that they will lose their motivation to become financially independent on their own terms. While nobody wants family strife as a result of an inheritance, not discussing it beforehand can only make the problem worse. A child who is hurt or confused by a parent's decision might be better able to cope with the situation by talking with the parent. However, once the parent is gone, those answers and opportunities disappear, leaving the child with haunting and frustrating unanswered questions.
The bottom line is that it may not be easy, but parents who have the conversation about inheritance will be helping themselves, and their children, to a better understanding that will help ensure future prosperity and, hopefully, future harmony as well.
Source: New York Times "What's Almost as Certain as Death? Not Talking About the Inheritance," Paul Sullivan, Aug. 1, 2014