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Family Communication and Estate Planning (FS1684)

Estate planning must be a financial priority at practically any phase of life. Sometimes the words estate planning, financial planning and retirement planning are interchangeable and refer to the same type of planning. People who plan ahead to manage their assets and financial resources will use appropriate professionals such as tax attorneys, accountants, financial planners and insurance agents to maximize their legacy to future generations and the community. Also, they organize their estate and related affairs so their desires are understood by family members and decisions are made ahead of time so family members are not left with many unresolved or difficult questions as a parent grows older.

Divya Saxena, M.S., Extension Associate

Sean Brotherson, Ph.D., Family Science Specialist


Get Your Estate Papers in Order!

When Suzanne Larson of New York City was in her late 40s, she began talking to her parents about getting their estate papers in order. However, they never took action. “Every holiday, when they asked me what I wanted, I’d just say, ‘Power of attorney,’” Larson says. “I told them, ‘Look, I don’t want to be a nervous wreck and a miserable person because you guys haven’t thought about what you want to do if something happens.’” After a few years of discussions, her parents finally completed the estate planning documents. “I feel a little bit more at peace. We’ve opened the door, and we are ready to have bigger discussions,” she says.

• What are your thoughts on Suzanne’s way of communication? What do you like or not like?

• What topics about estate planning does this vignette bring up?

• How can lack of estate planning and discussion affect family relationships?

What Is Estate Planning?

Estate planning must be a financial priority at practically any phase of life. Sometimes the words estate planning, financial planning and retirement planning are interchangeable and refer to the same type of planning. People who plan ahead to manage their assets and financial resources will use appropriate professionals such as tax attorneys, accountants, financial planners and insurance agents to maximize their legacy to future generations and the community. Also, they organize their estate and related affairs so their desires are understood by family members and decisions are made ahead of time so family members are not left with many unresolved or difficult questions as a parent grows older.

The Goals of Estate Planning

The basic goals of estate planning are to:

  • Create a definite plan for managing your financial resources and other assets while you are alive and distributing those resources after your death
  • Organize your financial affairs and other resources so they are understood by your children and/or other designated heirs
  • Communicate your desires so they are understood by family members and decisions are made ahead of time so family members are not left with many unresolved or difficult questions as a parent grows older
  • Leave a lasting legacy for your family members and future generations

Estate Planning Basics

Basic elements of effective estate planning include:

• Assessing the value of your estate and acquiring insurance (such as life and long-term care insurance)

• Preparing the appropriate legal documents (such as wills, health-care proxies and powers of attorney)

• Providing gifts to family members and charities, and minimizing taxes

Ask Me About My Estate

How would you answer the following questions?
If I were to die tomorrow:

• Who would get my property?

• Who would care for minor children, parents and/ or a spouse?

• Would the family business continue?

• Would the estate be settled according to my wishes?

• Would taxes, fees and costs be held to a minimum?

• Would a trust have been appropriate for me?

• Would my estate be settled in an appropriate and timely manner?

• Would family disagreements develop over how assets are meant to be divided?

• Would my family members know my funeral wishes?

What Did You Learn?

• What did these questions prompt you to think about?

• What goals might you set to communicate important things to others in your family regarding your estate?

Family Communication Plan

Family members should formulate a family communication plan as they pursue the estate planning process. Some basic elements to consider include:

1. Who to involve: Who do you trust (or not) and how would you like each family member or others to be involved in the conversation?

2. What to discuss: What are the topics to be discussed at specific times as part of the estate planning process and dialogue?

3. When and where to meet: When and where would family members be able to meet to discuss issues? Can it be done via phone or should it be face to face?

4. How will information be shared: Plan how information will be shared regarding key items such as estate details, wishes, etc.

What to Discuss in Estate Planning

Family members, particularly those who are growing older, need to know the exact value of all their assets. They may need to consult with their accountant or an attorney about how to do this, but a specific ledger with the name, address, telephone number and account number of any asset is very useful. Specific issues that need to be discussed in estate planning include:

• The will (or wills of multiple parents, etc.)

• Trusts (is there a family trust?)

• Financial contacts (list of accounts, assets, key financial contacts)

• Funeral arrangements (funeral wishes, burial plan and details)

• Contact lists

• Financial assets

• Ways and means used to transfer property (nontitled assets such as books, etc.)

• Decree of ancestry and dissemination (a listing of how things will be distributed to specific individuals)

• Durable power of attorney for health-care decisions (empowers someone to make health decisions on behalf of an individual and carry out wishes regarding care)

• Power of attorney for business (power of attorney empowers someone to handle business and personal affairs if you are unable to do so or need assistance)

• Letter of instruction

Starting the Conversation

Despite how important this conversation can be, initiating it still may be difficult. Here are a few suggestions to help guide you:

1. Pick a positive, comfortable environment during a period of relative calm. Don’t wait until a time of crisis when making adequate plans may be too late and family members may not feel emotionally able to talk.

2. Be sincere about your intentions. Be clear that you are initiating these talks out of concern that proper plans are in place and are understood.

3. Stress the importance and benefits of this conversation to everyone affected. One way to do this is to show an example of an estate that was handled improperly because family members failed to discuss their plans with each other.

4. Speak candidly but kindly to family members about why you want to get involved in a dialogue about managing finances or paperwork now or down the road.

5. Listen actively and carefully to their concerns so you can better assuage any fears.

6. Make clear you want to work together as partners. Estate planning involves talking about death and finances, topics families often avoid. Feelings of anxiety and concern can surface. However, through open communication, even the most challenging circumstances can bring a family closer together.

Setting a Family Meeting

Set a family meeting to discuss estate issues with the following elements:

• Set a time and place and invite all who need to be included.

• Use an agenda, take notes and save past agendas/notes for future reference.

• Have one person talk at a time using short, respectful messages – no interruptions!

• Everyone should have a chance to talk, but no one is required to talk.

• Do not allow put-downs or making fun of ideas or opinions.

• Keep it focused; 30 minutes to one hour is optimal. Have treats afterward.

Estate Planning Discussion Points

Each of the following questions is important to estate planning and helps you identify information to communicate with family members. Select an answer to each question and begin recording information that you can keep available and share with family members.

• Do you have a will? If so, where is it?

• Have you granted someone a durable power of attorney? If so, who has the power, and where is the document?

• Have you written a power of attorney for health care? If so, who has the power, and where is the document?

• Do you have a safe deposit box? Where is the box and where is the key? Where is the list of contents?

• What is the location of essential personal papers: birth and marriage certificates, dissolution of marriage documents, Social Security and military service records?

• Where are life, health and property insurance policies kept?

• Have you made a list of investments (savings accounts, certificates of deposit, stocks and bonds, etc.)? What are the mailing addresses of the institutions that have the investments?

• Have you made a list of the personal and real property that you own? Where is the list?

• Who are your financial advisers? What are their names and addresses?

• Have you developed a letter of last instruction? If so, where is it?

• If you have a retirement program, does it have a death benefit for survivors? If so, whom should the survivors contact?

• Do you have a living will?

• If so, have you communicated the details of the living will to family members?

• Is your living will registered with a registry in your state and/or selected health-care entities that may provide care for you?

July 2013

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