Tuesday, July 16, 2013

The Importance of Talking about your Estate Plan

     One of the more difficult aspects of working with clients to develop their estate plan is helping clients become comfortable discussing their goals and concerns for what happens to their estate after they pass away. This comfort is important because it is impossible to draft documents that truly achieve the client's goals when the client is unable to articulate those goals. Once clients have an estate plan it is also important that they become comfortable discussing that plan with those people whom they have trusted with its administration.
     After going through the initial process of creating an estate plan, many clients put those documents in the drawer and never mention them to their children to the people they have named in the documents to make decisions, except perhaps to tell them where the documents are located. This failure to discuss the client’s posthumous wishes can cause unexpected difficulties in administering an estate and hurt feelings of beneficiaries who do not understand why their parents made certain choices. For example, a client may choose to provide that assets are held in trust for their grandchildren as opposed to making gifts to their children. This may leave the children wondering if they've done something that made their parents reluctant to trust them, when the clients goal was to remove the burden of saving for college costs from their children in order to make their lives easier.
     In another scenario, a client may choose one child over the others to act as Successor Trustee. While the parent’s goal was to appoint the child who could most efficiently administer the estate, perhaps due to geographic location or flexibility of their schedule, the children are left wondering what they did “wrong.”
     The reasons clients have for distributing their wealth the way they do are as disparate as the number of estate plans. By taking the time to discuss an estate plan with the successor designees and beneficiaries who will be administering benefits from that plan, clients provide guidance and clarity that helps their loved ones achieve the clients' underlying goals.

     Estate planning is a ongoing process and communication is a major part of the process. While clients may not wish for their beneficiaries to know the full scope of the bequests made in their documents, by taking the time to discuss the scope and reasoning behind an estate plan clients can influence the lives of their beneficiaries with more than the monetary impact of their gifts.

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