Families don’t discuss end-of-life plans, which doesn’t help when family loss occurs
No one likes talking about death, but doesn’t mean you shouldn’t. In fact, you should be talking about it a lot more than you think you should.
Fidelity says 70 percent of families have strong misconceptions about the value of an estate and more than 30 percent of children don’t even know the value of their parents’ assets. It probably doesn’t help that most inheritors haven’t talked to their benefactors about their eventual wealth, RBC Wealth Management-US says.
“Discussions around estate and succession planning can be emotionally charged, so families tend to shy away from them,” says Bill Ringham, VP and senior wealth strategist, RBC Wealth Management-U.S. “But for families that want to leave a legacy and ensure the nest egg they have built is protected across generations, communication and planning are key.”
Being unprepared for an inheritance comes from hard-to-have talks with relatives. Not having any knowledge about what they are receiving becomes a huge issue when the benefactor has passed. RBC says more than one-third of inheritors don’t receive any professional help after learning about their new wealth.
Why you need to have will and estate planning
RBC says the sooner children understand major money matters, the better.
“The earlier children in the U.S. start learning, the more confident they will feel when making financial decisions,” RBC says. “Seventy percent of those who received an education before age 18 are confident in their understanding” of finances.
Financial literacy is an ongoing problem. The vast majority of us aren’t great when it comes to handling money, everything from basic saving and budgeting to investments and estates. With our basic lack of understanding, it’s no wonder we can’t handle talking about money issues for when our loved ones are no longer with us.
“No matter who you are or what your family portrait looks like, establishing an estate plan is your best bet to ensure your loved ones are taken care of in your absence,” says Kevin Ruth, head of wealth planning and personal trust at Fidelity Investments. “While it is human nature to avoid thinking about one’s own mortality, leaving the next generation in good hands with the information they need to be successful can help build a stronger family foundation.”
Fidelity says it’s best to start out with outlining your estate plan exactly the way you want to. How large is your estate? What’s your family situation like? Children, step-children, grandchildren and other relatives may be considered when making a plan.
Estate planning attorneys can help you create the plan that is right for you. It’ll cost you, but making sure you’re doing everything legally and correctly is worth it. You don’t want your death to create any drama.
Confirm your money is in line with your estate. Being financially aligned with your estate plan should be essential. Remember that just because you’re done planning doesn’t mean you can’t change something later. It can be updated and changed any time you want it to.
Once you’ve got a handle on your will and estate, make sure inheritors know exactly what is coming. Let them know that they know they can ask any questions, regardless of how uncomfortable they are, so they understand everything that should happen after you pass. Just because they are hard to ask doesn’t mean it isn’t necessary.
Article last modified on June 22, 2017. Published by Debt.com, LLC .