You’ve finally gotten around to developing your estate plan. That’s something too many people never do. Sometimes, the thing that people dread even more than drawing up an estate plan is telling their adult children what’s in it.
How much you tell them depends on several things, such as family (especially sibling) dynamics, how big the estate is and how you’re dividing it. However, financial experts generally agree that there are things you need to tell your children and that more people make the mistake of not sharing enough information than sharing too much.
Estate plans aren’t just about what happens after you die
As part of your estate planning, you’re likely giving people powers of attorney over your medical care and finances if you’re unable to care and/or speak for yourself. If you want one of your children to have these responsibilities, ask them first. They may not want the responsibility. Whoever you choose for that role, let the rest of your family know.
The same is true for the executor of your estate. It’s best if your family knows who you’ve selected and why. This will make their job easier when the time comes.
Why giving your children some idea of their inheritance is usually wise
Likely, you’re leaving each child a percentage of the value of your estate. You don’t know for certain what that will be when they receive their inheritance. However, it’s usually best to give your kids some idea of whether it’s a few thousand or a few million (or probably somewhere in between). This can help them with their own financial planning. Likewise, if you’re planning to leave one of your children a large asset like a home, make sure they want it.
If you’re not leaving your children an equal percentage of your assets, it’s often wise to explain to them why rather than let them wonder and feel resentful after you’re gone. There are many reasons why you may leave one child more than the others (or give everything to charity).
If you choose not to share details of your estate plan with your children, at least let them know there is one, who to contact when the time comes and where to find necessary documents and information, like your estate planning attorney’s name and phone number.