What Your Family Needs To Know About Your Estate
By Cindy Diccianni, Financial Advisor
Mums the word!!! Don' t tell your heirs or family, but keeping secrets about
your estate plan is probably the easiest way to ruin all of your careful
planning.
Our culture teaches us not to tell our heirs - typically our children -
about our estate plans:
* How much it is worth
* Who will receive what and how much
* Where our financial documents are located
Oftentimes the animosity between family members spills over into court
following the death of the estate owner, and this can destroy your original
intent. Such secrecy is often the reason why estate plans are not created in
the first place, causing the estate to pay out more in estate and
inheritance taxes than should have been necessary, or resulting in
distribution of assets to people or in amounts not desired by the deceased.
Ultimately, how much about your estate plan and to whom you disclose it is a
deeply personal choice. But the larger and more complicated your estate,
typically the more critical it becomes that the major heirs be informed
before death. Financial Advisors and Estate Attorneys offer several
suggestions when thinking about when and with whom to discuss your estate
plans.
How to help your heirs do their own planning
You can help your heirs make better financial planning decisions for
themselves if they know your intentions. For example, if you plan to give
most of your estate to a charity, they may avoid committing themselves to
buying an expensive home on the assumption that their inheritance would pay
off the mortgage. A charity also can plan better, or suggest changes to you,
if you plan to give it a large bequest. A charitable remainder trust can be
very beneficial in this scenario.
When you want to make unequal bequests
Some family members may be better off financially than others because of
their professions and incomes, or you may have an heir who has a disability
from an accident or may need extra financial help. It can reduce potential
friction among heirs and court challenges by explaining ahead of time why
you are bequeathing more to one heir than to another.
Second Marriages
In today's world more and more people are getting married for the second and
even a third time. Often, there are children from previous marriages who are
heirs to the assets of the deceased. Second marriages are a major source of
conflict in estate planning. Advance discussion can help smooth out
potential problems.
To help the inheritance process go smoothly, consider holding a meeting with
all of your major heirs. Here are some guidelines for making the meeting a
success.
* Develop and revise an agenda with feedback from the heirs.
* Hold the meeting at a neutral site, like a hotel. Be sure to
screen out all phone calls and any visitors if the meeting is held at home.
* Share the general outline of the estate plan in writing, and
explain why it is set up the way it is.
* Indicate your openness to change the plan, but make it clear to
everyone involved that the final decisions will rest solely with you.
* Do not commit to any changes at the meeting.
* Encourage your heirs to express their wishes and their concerns.
* Invite your financial advisor to assist you in running the
discussion and clarifying any issues.
* Create a file to keep all of your documents together. I call my
file an "If I Die File".
* Update all of your legal documents every year, if necessary.
You may want to use this meeting as an opportunity to inform your heirs
where to find important documents and records. This helps to avoid
frustrating searches for wills, safe deposit box keys and financial
documents. Inform whomever you named as executor of your estate, give them
details about your estate plan, and most importantly, explain the intent of
your decisions. Don't "surprise" them at your death.
It's never easy to discuss what comes after your death. But with careful
planning, you can ensure that what happens to your estate is what you
intended.
Cindy Diccianni is a Registered Nurse, a Certified Senior Advisor (CSA), a
Registered Investment Advisor and a Registered Representative with Leigh
Baldwin & Company member NASD and SIPC. She is affiliated with Ortner,
O'Brien & Ortner Advisory Group, Inc. and co-founder of Nurturing Your
Success, Inc. Her passion is assisting clients in creating financial
freedom. You may visit Cindy at www.nurturingyoursuccess.com
<
http://www.nurturingyoursuccess.com/> , write to her at
Cindy@... or call her directly at (610) 251-9393.
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