Planning Your Estate
by Scott Blakemore
for Jackson Magazine
What is your dream sportscar? Corvette, Mustang, Porsche, Ferrari, Lamborghini, Bugatti, McLaren? Now, imagine you own it and decide to give it to your son or daughter … but they don’t know how to drive … because you never taught them. You just hand them the keys and say, “Good Luck!”
I think we can agree this strategy is a little crazy and unwise. However, when you and your spouse are deceased, and your heirs inherit your estate without understanding how it was managed and for what purpose – it is the equivalent of handing a sportscar to an untrained driver.
I speak with clients daily about retirement cash flows, portfolio allocations, distribution timing, and taxes. And while those things need to be understood and managed for a successful retirement, planning for the transition of an estate is equally crucial – especially if you’re concerned your heirs may not be ready to manage it or worse, you fear it might destroy them.
I know talking about death can be uncomfortable, and kids rarely want to discuss a future where their parents are gone. But that day will come whether we like it or not. Talking about death with your children is like talking about sex – always a bit awkward, but the earlier the better.
So how do you prepare to talk to your children about your estate? Here are several simple ideas to get the conversation started and a few that dig a little deeper.
First, the easier items to implement:
- Talk about your funeral. Write down your wishes and share them with your family.
- Keep your bank, investment account(s) and insurance beneficiaries up to date.
- Introduce your family to your Financial Advisor, CPA and/or Attorney.
- Use Estate planning tools. Let the family know if you have a Will or Trust as well as Durable and Health Care Power of Attorney (POA) documents. Make sure your designated representative is willing to serve, understands your wishes, and knows where your documents are located.
Second, the more involved items to consider:
- Have an annual family meeting to discuss any changes you have made to your financial or estate plan. Be sure to allow time for questions.
- Bring heirs into the conversation with organizations where you volunteer or provide financial support.
- Create a family foundation or donor advised fund to give together during your lifetime. This is a great teaching tool.
These items will obviously require some work. However, with your heirs being part of the discussion, and doing the work alongside you, you can be confident they not only hear and see your values but participate in them as well. They will experience the legacy you are trying to create while learning valuable lessons about managing the resources that will one day be under their stewardship.
Remember, learning to drive isn’t accomplished through watching a YouTube video, and neither should learning how to manage an inheritance. I encourage you to work through the fear and discomfort and invite your children into the conversation to create a legacy impacting them and our world for good.