You’d be hardpressed to find any family that’d rather sit around the table discussing estate plans than going out to eat, enjoy the day outside or do just about any other activity as a family. No one likes to think about our inevitable mortality, but we all know that it is just that - inevitable. Estate planning can be an immense blessing to any family at a time of great loss. Below we’re discussing five of the most common emotional blocks family members face when trying to establish a successful estate plan.
Roadblock #1: Discussing Death
Talking about one’s own mortality isn’t a particularly fun thing to do, especially in the company of a partner, spouse, children or grandchildren. But the reality is, not discussing it doesn’t keep it from happening. Instead of trying to sit down and talking about your future death with your family, try to use gentler terms like “when I’m gone” or “once you’re on your own.” Finding other, softer ways to frame it can help you and your loved ones move past the morbidity and on to thinking about the next steps and how to move forward efficiently. Another approach might be familiar to you if you are one of my clients - we often talk about being hit by a bus outside in my parking lot. If you've been to see me, you know that's a pretty unlikely possibility, but it gets the point across and lightens the mood.
Roadblock #2: Assessing Assets
In order to craft a successful estate plan, you need to account for every asset. And if you’re well-established and have lived a long life, you’ve likely accumulated quite an estate. But it can be overwhelming to think about assessing each and every account, property, car, painting, piece of jewelry and more. So overwhelming, in fact, that you find yourself putting it off altogether.
If you’re able, work together with your spouse or a loved one to start two lists - financial and physical. As you think of things you own, start jotting them down into their appropriate category. Once you have a fair amount listed out, you can begin working on the next set of details - breaking down the categories into smaller, more specific subsections, listing out the price or value and thinking about who you’d like to have what. Move through this process one small step at a time to help reduce the feeling of being overwhelmed while still making progress toward your estate plan.
When we do financial plans and reviews, we try to list out your accounts, the account titles, and the beneficiaries and periodically revisit this "estate profile". This becomes a valuable document when you meet with your attorney and when someone dies.
Roadblock #3: Working With a Lawyer
This is one roadblock you may not have even realized you had - working together with a lawyer. If you’ve worked with a trusted attorney in the past, this may not be an issue for you. But for those who are in need of working with a lawyer for the first time, the search can be intimidating, nerve-wracking and confusing. But estate plans can be complex, and you need to make sure you’re drafting one up that offers tax-benefits for your loved ones and protection over the things you love.
If you’re apprehensive about hiring an attorney, asking friends and family or other trusted professionals for referrals may be a reassuring step in the right direction. And if you find one who isn’t listening, speaking over your head or you just have a bad feeling about them, don’t be scared to pick up your things and go. Developing an estate plan that addresses your needs and concerns is far too important to settle with the wrong professional.
I enjoy working collaboratively with several local attorneys - it's great to have a financial team of professionals working together on your behalf - a financial advisor, a good estate planning attorney, and an accountant make your financial life much more integrated and organized.
Yes, it cost money to hire these advisors, but it often costs a lot more to make mistakes that have to be cleaned up later at considerable expense and angst.
Roadblock #4: Deciding Who Gets What
Uncomfortable truths can start to surface when you begin thinking about who should be left with what. Even happy parents and kids with no family issues need to be realistic about the future - what’s the likelihood the widow will remarry, what happens if a child dies unexpectedly, what if there’s a divorce in the family, etc. And things can get even harder to discuss for families who may be struggling. Do you leave the child whose battling addiction a large sum of money, or do you give the majority of your wealth to your more stable child? If things have gotten rocky between you and a loved one, do you disinherit them altogether? There’s no shortage of emotional decisions to be made around who should get what, but you can’t let that stop you from pushing forward in determining who will receive what in the event of your passing - or else you may lose control of who receives what altogether.
These issues are actually quite common, and can be addressed by a good estate planning attorney. There are ways to have more control over assets after you die, but of course, that does add some layers of complexity. This is something we would discuss in our financial planning meetings and then take to an attorney to draft documents and help craft solutions.
Roadblock #5: Paying For an Estate Plan
Establishing a successful estate plan doesn’t come cheap. But if that’s keeping you from pushing forward in creating one, it may help to think of it as establishing a legacy for your family and leaving a gift to your beneficiaries. Taking the time to work with a professional now can help save your family members from costly tax obligations or other fees associated with dividing up your property.
Discussing an estate plan is no walk in the park, but it may be easier to address when you think about what it truly is - the gift of passing on a legacy in a tax-efficient manner to your loved ones. Take your time working through the emotional roadblocks discussed above, and keep moving forward in developing a successful estate plan now to protect your family in the future.
Estate planning is a very important component to your overall financial plan. My clients know that I'm with them every step of the way... even when I'm nagging them to have documents drafted and to fund trusts.