Much ink has been spilled, including here, on best practices and ways to cut to the chase when dealing with estate planning. It’s a massive elephant to eat, so to speak, and so having a rubric or starting point is helpful. It helps break the enormity into manageable, bite sized pieces.
Everyone involved desperately needs transparency in this process, yet we make it much harder on ourselves than need be. Why? It’s emotional. It involves family dynamics. It involves ego. It involves doing the yeoman's work. It’s about money. But in the absence of facts, humans will invent stories, often ignorant of or ignoring the truth.
According to Kurt Supe CPA, “Among parents 55+ with at least $500,000 invested, 52% haven't told their adult kids what they're worth. 95% of those adult kids say they're ready to handle an inheritance. A quarter of the parents disagree.” But the only way to learn how to hike a mountain is to start hiking mountains.
The two critical questions that need to be asked are:
- What’s the plain summary of the plan?
- Where are the red flags in the plan?
Said another way, “Tell them how it works, not what it's worth. Where the documents are. Who the executor is and why you picked them. Whether it's split equally, and if it isn't, why. What happens to the house. Who they call first.” This is about planning, process, and structure, not the amount!
Once the framework and expectations and process are transparent, understood, and doable, we can then shift the conversation to the amount. And this is where we all need to remember that it’s Mom and Dad’s money. To quote again, “And that you plan to spend a good part of it on purpose. That last part matters more than you'd think.”
Estate planning is a gift of love for you, for Mom and Dad, for the Next Generation, and for the entire family. An inheritance is an upside surprise, the result of years of good decisions and purposeful execution, not an expectation from or a demand by the heirs. And with this gift of love, there will be more gifts of assets. We can help ourselves and our families move forward…