By: Barry E. Haimo, Esq.
MONTH 27, 2020
The Importance of Communication in Estate Planning: Between You and Your Family
Sometimes people just don’t feel comfortable talking to their family about what they plan to do with their estate. And that makes sense. You’re essentially planning for a time when you and other relatives will no longer be here, and that’s hard.
That doesn’t change how important it is to have these conversations, though. And the fact remains, you should have them while you can.
Share the Plan: Families Who Are Open Have Estate Plans That Succeed
Sharing your estate plan increases chances for the growth and maintenance of wealth – and this is a huge deal.
When families don’t talk about the hard work behind building an estate, younger generations don’t have the same opportunity to continue its growth and success. In fact, nearly three-quarters of wealthy families lose their wealth by the second generation. (And 90 percent of third-gen successors squander their entire estate.)
Simply opening a conversation with your loved ones regarding what you’re doing and why you’re doing it can change the future of your estate and how it is managed when you’re gone.
Three Common Ways to Open Family Conversations
Although estate discussions vary widely based on personal circumstances, there are three common ways families tend to initiate these conversations. Some even employ more than one tactic over a period of time.
One-on-One Conversations
Talking to individual family members privately to start can often help ease them into a larger discussion together. Most clients begin with their chosen executor.
Family Meetings
If a family is already fairly open about financial matters, an initial family meeting may work. Otherwise, talking to a few individuals who might need preparation before the family meeting can help.
Incorporating a Family Counselor
When tensions are high – or could become high at the outset of this kind of discussion – you can also bring in an experienced family counselor to help mediate them.
Explain the Decisions: Knowing Why Can Make a Positive Impact
Explaining how your decisions were made and how they impact your ultimate estate goals and intentions empowers both you and your relatives. History has shown, for instance, that choosing the right executor can make all the difference in how long an inheritance lasts.
- Focus on the positive attributes of the person to whom you’ve assigned an asset or duty rather than why another family member wasn’t chosen.
- If someone begins showing signs of having difficulty with decisions, acknowledge what you see in them and reassure them of their importance in this plan.
- Try to bring them back into the fold by sharing what task you have assigned or items you have bequeathed to their care and the positive attributes that led to that decision.
Base Decisions on Successors’ Strengths, Not Weaknesses
Let’s say a parent’s first child is running a family ranch and their middle child is an accountant. So instead of choosing the eldest, they select the second child as estate executor.
The parent may explain to both children the decision like this:
The Accountant Can Help Estate Growth
The estate needs to be managed by the younger sibling because he or she has spent their entire career working with numbers and money, and can effectively work with estate plan managers to ensure the continued growth of the estate can continue to help the family.
The Rancher Can Manage the Ranch’s Success
If the eldest seems upset, then the parent may point out that the ranch must continue to be managed by them because they’ve proven to be amazing at continuing the ranch’s success – which will likely play a large role in their estate plan.
The Estate Benefits from Both
Driving home the importance of each role can solidify a sibling relationship that could have otherwise gone south.
Transparency can be quite difficult, but coming from a place of love and concern for your family’s future can help.
For more personalized guidance in sharing your plans with loved ones, reach out! There are a number of ways to get through these tough conversations successfully.
Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose®
Email: barry@haimolaw.com
LinkedIn: http://www.linkedin.com/in/bhaimo
Google+: https://plus.google.com/u/0/+BarryEHaimoLaw/posts
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