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Avoiding Inheritance Surprises

suprise.jpgIn many columns over the years, I have mentioned how important it is for parents and children to talk about the parents’ estate plans and the provisions of their wills. Actually having such a conversation can be terribly difficult, whether you approach it as the parent or the child. Perhaps the following suggestions may be helpful.

1. Presumably, your will reflects your values around money—whether you believe in giving to charity, in providing first for your family, or in leaving a legacy to your community. If you communicate those values openly during your lifetime, you will give family members a better idea what to expect from your estate.

Such openness isn’t necessarily an easy habit to develop. In our society, money is almost the last taboo subject for discussion, even though we are increasingly open about many other sensitive and once-forbidden topics. It often works best to begin gradually to let your family members know what you believe about money.

One way to do this is by taking advantage of openings in general conversation. For example, a news item about a billionaire leaving huge sums to a charitable foundation can be an opportunity to express your opinion of such an action. This can lead to a discussion about what you would do with your own billions if you had them, then to a more realistic conversation about how you plan to distribute the assets you do have.

2. If your will does not treat your children “equally,” for whatever reasons, it may be best to share that conversation.jpginformation individually rather than announcing it at a family get-together or letting them find out about it when your will is read. Maybe you’ve given one child significant financial help, for example, and as a result are leaving less of your estate to her than to her siblings. Or maybe you’re leaving money outright to one child but leaving a sum in trust for another child who is less responsible. Talking about such provisions privately with each child can give the two of you a chance to discuss the bequest and the reasons behind it. These conversations, difficult as they may be, can do much to reduce conflict between siblings after you are gone.

3. One of the most unfair things you can do is allow children to assume they are inheriting more than is the case. By not telling them, you may avoid conflict now, but you’re sowing seeds for deeper conflict and resentment after your death.

On the other hand, it can be difficult for children to unexpectedly inherit a large amount. If your estate will be substantial and you have more than enough for your own needs through old age, one possibility might be to begin giving to your children now. Such gifts can open the door to conversations about their expectations, helping them begin to think about how they will handle their inheritance.

Although it is seldom expressed, perhaps the strongest reason for not discussing estate plans with family members is simple fear. Parents may be afraid that children will disapprove of their plans, will build too much on their expectations for an inheritance, or will be angry at the parents or resentful of other heirs.

True, talking to your family about your will and your wishes can be difficult and even painful. Those discussions, however, will almost certainly be less painful than the stories a child may make up after you’re gone about why you made the choices you did. Having the courage to discuss your estate plans with your family can be a valuable piece of the legacy you leave them.

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