Ah, Thanksgiving—a time when families gather, usually at one table, for good food, good cheer and—well, maybe not always—good conversation. Politics is a non-starter for many families. So this year, instead of fighting across the political divide, why not talk about something that could actually help your family, emotionally and financially?
Having the family all together presents a golden opportunity to discuss an important issue: estate planning. True, this isn’t always an easy discussion (though we hope it’s easier than politics). As a parent, you may worry about discussing your mortality with your children. As a son or daughter, you may worry that your parents might think you’re greedy. But more often than not, parents and children alike are glad for a thoughtful, caring conversation about these sensitive topics, because the benefits usually outweigh the discomfort.
Despite the emotional hurdles that can block you from broaching the subject, opening the estate planning conversation will spare you the much more difficult experience of a death in the family when no one knows the decedent’s intentions and possessions—prompting a prolonged and tedious estate administration process.
If you’re not sure how to talk about estate planning with your family, here are seven questions to help you decide whether now is the time. A “yes” or “maybe” answer to any of the questions is your cue to have that conversation. It may save everyone a lot of stress when the inevitable happens.
1. Are you concerned for yourself or for a loved one about the potential need for nursing home care? There is a lot to think about, including whether or not Medicaid assistance will be available to pay for the high cost of skilled nursing care. Share your concerns and determine what you need to find out in order to develop an informed plan.
2. Do any of your children have vastly different needs? Perhaps one of your children is much more financially secure than the other. Perhaps you have a child with special needs. Do you want to take these things into consideration when thinking of your estate plan?
3. Do your loved ones know what you own? Are your assets easily accessible when you die? If your family is not aware of what you own, such as a retirement account, they can run up legal fees on a wild goose chase seeking to discover assets. That’s because a financial institution will not reach out to family members to inform them of an asset’s existence if the institution is not aware of the owner’s death. You don’t have to tell your family the value of your assets—merely that they exist.
4. If your marriage is on shaky ground, do your parents know? You don’t want to worry your parents, but at the same time, if a divorce is on the horizon, your parents can create or change their estate plan to protect your inheritance from a future ex-spouse. Broaching your concerns with your parents may also help you to gain needed emotional support.
5. Do you own a business? Are your business partners non-family members? Your ownership of a business is an asset. Most businesses have an operating agreement that addresses the transfer of ownership interests in the event of your death. If one of your children is active in the business, be certain that the provisions in your operating agreement about post-death transfers and your own estate plan with respect to the business reflect your intentions—and that your child is on board.
6. Are you thinking of making gifts during your lifetime? Certain assets are better to gift during your life than at your death. This is due to many factors, including technicalities involving the tax code, your finances and your family’s finances. Discussing your family members’ financial needs can help you to define priorities and timing of gifts.
7. Are you unmarried but in a committed relationship? Death without an estate plan means that only your spouse and/or blood relatives have the legal right to your entire estate. Having at least a will in place is one way to ensure that your assets will be distributed in accordance with your intentions. And it’s better for all involved to understand those intentions in advance.
In sum, there is plenty to think (and talk) about on this Thanksgiving with your family, aside from politics! I would be pleased to help you navigate important decisions about your estate and tax planning. Contact me by email at email@example.com or by phone at (508) 756-2423.
Your lawyers at Mountain, Dearborn & Whiting LLP wish you and yours a happy, safe and peaceful Thanksgiving.