According to a recent report by Wells Fargo, 65% of the people surveyed had not talked about their will or estate plan to their families.
What makes that figure more shocking is those they surveyed were all investors. They should be more financially aware than most.
Why is it crucial to communicate your estate plan to your family?
There are several reasons you should sit down with family members and tell them about your estate plan:
- It communicates your intentions: You may have specific preferences for how your family should use the assets you leave. If you do not explain this to them or at least set it out in your estate plan, they may never know.
- It helps you understand their wishes: Perhaps one of your children feels they already have enough. Maybe they would prefer you give money destined for them to a sibling or a charity. Why waste time, effort and money planning to give a child something they do not want?
- It helps them plan: You are not the only one who has financial planning to do. To make the best decisions for their future, your family needs to be in full possession of the facts. Why let your child waste money on an expensive mortgage if they are about to inherit the family home?
- It helps your family stay friends: Imagine how awful it would be if your family fell out over the property you left them. Estate plans can be contentious. They might not appear fair to everyone. Explain your decisions while you can.
You spend a lot of time creating the perfect estate plan. If you want it to function as well as you hoped, make time to discuss it with your family. Remember to inform them of any changes you make over the years.