New York Estate Planning & Elder Law Blog
Many parents with adult children find the idea of discussing their estate plans uncomfortable, embarrassing, or unnecessary. Few parents want to think about their mortality or bring up the subject with their kids. Concerns about family fights over parts of the estate, which child is getting what, or reliance on a future inheritance also put parents off from discussing their plans with their children; however, there are some great benefits both emotionally and financially that can come with sharing your plans with your children.
Telling your children ahead of time about your estate plans allows you as parents to explain your decisions and lets the children plan their lives accordingly. Feedback from the children can also have an effect on your estate plans that you can implement before it is too late. In some cases, there can even be tax benefits involved. Full disclosure of estate plans may not be right for every family, but here are five reasons why it might be worthwhile to share your estate planning with your children.
You Can Settle Any Issues
Resentment over distributions in an estate plan amongst children can last a lifetime and end up costing them their inheritance if someone decides to sue. By having the conversation with the children, parents can explain why they are bequeathing their estate in that way. Perhaps one child needs more assistance, one has multiple children and others have none, or maybe the parents plan on leaving a segment of the estate to a nonprofit or charitable organization. By discussing the “why” while alive, it can alleviate hurt feelings in the future.
You Can Save Hassles and Prevent Mistakes
When parents let their children know what to expect in the estate plan, and where everything is located, it can save them a lot of hassle during an already devastating time. Grieving while also trying to sort out financial and legal issues is a nightmare that can be easily avoided with a simple conversation.
You Can Presently Increase Their Quality of Life
Not all children will simply give up on their dreams or become lax in their lives because they know that they will eventually get an inheritance. In fact, many adult children could use that money now to help with a business, provide for their family, or use it in other productive ways. Sometimes gifting part of the inheritance while the parents are alive is more productive for the children than waiting until the parents are gone to receive it.
Your Children Might Have Been Ideas for the Estate
Some parents might have concerns about specific assets in the estate, particularly a house or business, and want to ensure that it will be taken care of. Discussing these plans with the children can help the parent see any potential pitfall in their requirements and allow the children to know what is expected of them.
You Can Save Them Some Taxes
Lastly, parents need to consider the tax consequences that leaving their estate might have on their children. This is especially important for adult children that already have a taxable estate without the assets that the parents leave behind. By coordinating estate plans with their children, parents can help save their children taxes by exploring other options for inheritance such as passing on wealth to the grandchildren or gifting assets while alive.