It’s Better to Know

Question: How much information should I share with my beneficiaries about my estate plan?

Answer: Many people hesitate to share all the details, especially dollar valuations, regarding their estate and legacy planning, and that’s okay. A successful transition of family wealth does benefit from careful planning and open communication about specific material goods (not necessarily dollar amounts), family values, specific roles and responsibilities, and expectations. You’ve accumulated experiences and wealth. This privilege brings responsibilities.

You’re not alone; State Street Global Advisors reports that $30 trillion to $41 trillion is expected to be passed from one generation to the next by 2048. The problem? Without careful planning, almost 70% of heirs’ money, assets and family harmony disappear after an estate transaction.

You have the opportunity while you’re here with your family to set them up for success. A chance for open, honest communication, and for nurturing future-focused conversations about values, charitable giving, and diligent stewardship. 

Estate planning is more than transferring money. It’s about what that money can do for future generations while allowing them to grow closer, stronger and to prosper. The conversations may be sensitive, but they’ll likely be worthwhile. According to a UBS report, families are happier and more satisfied when we include heirs in inheritance planning. Family meetings are a wonderful way to frame these conversations. 

Working with your estate planning attorney and creating the legal documents is the first step. Outlining expectations and details (within your comfort level) with your heirs what your wishes are helps them mentally prepare for a successful transition of the family’s legacy, values, unity, and philanthropic mission. 

Our family began this process years ago and it was initially met with some resistance bordering on disdain for the subject matter. We now talk about future planning with ease and have disarmed an awkward conversation with care and love. Valuations are not shared, yet the sentiment and planning process are freely discussed. In addition, you may want to let those that you’ve placed in roles of responsibility such as health care and financial power of attorney, know that you’ve chosen them and what their responsibilities will be in the event they are called on to act on your behalf. No one likes that kind of surprise without some sort of warning. 

Road Map

We’ve found that it helps families to start the conversation with a family mission statement where they outline what wealth means and how they hope it will be utilized going forward. In our family, if something happened to any of us tomorrow, we are each comfortable with how to access details and competently manage financial affairs. Family members know where necessary documents are stored and how to access them. We keep each other up to date and share who the key members of our financial team are with one another so there’s no mysteries when the time comes to contact them. This adds a level of comfort and understanding. 

Support whatever conversations you do have with documentation, locations of legal paperwork, passwords, insurance policies, titles, and deeds with a trusted attorney. Don’t forget to include the contact information of your estate planning team in case your heirs need it down the line.

In addition to your estate plan, trusts and legal will, consider taking some time to create a family love letter, also referred to as an ethical will, for your survivors, spouse, children, and grandchildren. Your letter can serve a variety of purposes, but most pass on facts, feelings, memories and wishes, important events and family stories. 

Unfortunately, as reported by The Journal of Financial Planning, most family wealth disappears when it’s distributed across multiple generations. Their research and data clearly demonstrate that lack of transparency or a shared family vision can adversely impact the next generations. Family meetings provide an outline for future discussions and decisions. We’re happy to help outline these important conversations and facilitate them for you. 

It’s a complex privilege to pass wealth to another. This act deserves thoughtful preparation and honest, ongoing conversations. Circumstances can and will change, as should your estate plan. So, work with your advisor along with other planning professionals to find fair answers to important questions, establish trust and open dialogue, and provide the gift of opportunity to those who matter most. Stay focused and plan accordingly. 

The opinions expressed are those of the writer as of October 17, 2021, but not necessarily those of Raymond James and Associates, and subject to change at any time. Information contained in this report was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance does not guarantee future results. Raymond James and its advisors do not offer legal advice. You should discuss any legal matters with the appropriate professional. 

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This article provided by Darcie Guerin, CFP®, Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email darcie.guerin@raymondjames.com Website: www.raymondjames.com/Darcie.