Why You Should Talk To Your Kids About Estate Planning

So, you've got your estate plan sorted, and now you want to help your children achieve the same peace of mind. Discussing estate planning with your kids can be tough, but it’s worth it to help them prepare for the unexpected and protect their families.

Why should you discuss estate planning with your children, and how do you start the conversation? Read on to find out.

Reasons to Discuss Estate Planning with Your Kids

People have different reasons for wanting to talk estate planning with their children. Here are a few common ones:

Naming a Guardian for Minor Children

If your child has kids of their own, an estate plan lets them name a guardian to take care of their children if they pass away before their kids reach adulthood. Without a guardian named, the courts will decide who raises the child, which might not align with your child’s wishes.

Have More Control Over Their Legacy

Your child might want to leave their wealth to their kids but needs a plan for managing it until they’re old enough. An estate plan allows your child to name an executor to handle the assets until their children are ready. They can also set up a trust with specific instructions on when their child can access the inheritance.

Specify Who Gets What in a Will

A will lets your child decide who gets what from their estate. This is straightforward if they want to leave everything to their children. However, it can get complex with stepchildren or others they might want to include or exclude.

How to Talk About Estate Planning

Some conversations are tough but important. Here are tips to help you discuss estate planning with your kids:

• Know the Essentials: Understand the key estate planning documents your kids should have, like a will, power of attorney, and health care proxy.

• Bring It Up Early: Life is unpredictable, so help your children prepare, especially if they have minor children or significant assets.

• Be Open and Honest: Explain why the conversation is important to you. Your sincerity will come through.

• Be Aware of Family Dynamics: Consider talking to each child separately if they don’t get along.

• Focus on the Positives: Emphasize the benefits of having an estate plan, such as saving time, stress, and money for the family.

• Blame Your Financial Advisor: If needed, use your financial advisor as an excuse to start the conversation, like saying, “My financial advisor and I were discussing estate planning…”

Example

Imagine your adult daughter Charlotte has two minor children. If she and her spouse pass away without an estate plan, a judge will appoint a guardian for their kids, which may not be their preferred choice. With an estate plan, Charlotte can name a guardian and set up a trust to manage the inheritance for her children, ensuring it’s used for their living and educational expenses. The trust will distribute the inheritance when her children are older and more financially responsible.

The Bottom Line

As a parent, discussing estate planning with your kids is crucial for safeguarding your family’s future. Though it might be uncomfortable, it’s an important step in protecting your children and grandchildren.

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