The holidays are here. A time for family, for friends, and for gathering around the table to feast. But what would a gathering be without certain taboo topics? No, not politics. I’m talking about inheritance and estate planning. Who is in the Will, who has been omitted, and who has work to do if they want to stay off the naughty list?
Many of my clients are hesitant to share their estate planning documents with their immediate family members as they believe it will be upsetting or otherwise is no one’s business but their own. To an extent, they are correct. No one needs to know how much money you have or how much money they stand to receive upon your passing. Most would also recognize that discussing death or an uncertain future can be unpleasant and can damper the holiday spirit. Notwithstanding, the reality is that the sharing of at least basic information can prevent panic and unnecessary hostility in the future.
First, there is the issue of an information deficit. When a client passes, their nominated executor or trustee will need to gather assets and pay creditors. That fiduciary will struggle in their position if they don’t know what you have, where you keep it, or if they have even been nominated. Telling someone where you bank and keep your “cash on hand” is not the same as telling them how much money you have. It is possible to share helpful information without violating your own privacy. A simple list of the type of property you own, your passwords, and your reoccurring expenses can save thousands of dollars in future attorney fees.
Similarly, one should also consider telling their family where they keep their critical documents in the event of an emergency. Equally important is making sure those documents are accessible in a timely fashion. Placing an original power of attorney or health care surrogate in a safe deposit box can be a substantial mistake if the nominated agent is not a co-lessee on the box, or if an emergency occurs after banking hours.
Finally, as uncomfortable as it may be, let your spouse, partner, or children know if you are disinheriting them (especially if it is not for lack of love), or if you are leaving them less than an equal share. Most of the time, my clients choose to leave unequal distributions because they feel a certain child has a greater need, or because one child has sacrificed to provide care. Time and again, we see this unequal distribution come as an extreme shock during a time of bereavement. There is no written explanation, nor is there a loved one present to justify their decision. This typically leads to anger, litigation, and blame directed at the family member who received a greater share. This discontent is avoidable – especially if discussions occur while everyone remains in good health and of sound mind.
While I would admit that the carving of the turkey isn’t the best time to strike up such a conversation, consider sharing your plans with your family. It is a gift that they will come to appreciate.