September is Healthy Aging Month. While many boomers are practicing healthy aging and living longer, it can also mean that it’s easy to defer the family conversation around the topic of wealth transfer. Getting the convo going with your children about passing on your assets can be a sensitive topic; one many families tend to avoid. Unfortunately by putting off this conversation, you risk leaving the outcome to chance. The lack of a clear estate plan adds extra stress when you are gone and can disrupt family harmony. Having a discussion with your loved ones about wealth transfer while you are alive means everyone has the same understanding of the future. It’s a good time to be candid with your kids.
1. Start Communicating Early about Wealth Transfer
It’s pretty hard to have a discussion with your kids about your final wishes when you have one foot in the grave. Talk to your kids about your estate plan while you're still healthy, not when you may be in the middle of a health crisis and emotions are running high. Starting early also allows for a series of conversations over time and allows for family members to ask questions and contribute better to the process.
2. Set The Time and Place
If you have a big family, consider having the conversation during or right after a family picnic, family reunion, or annual family retreat. Members will generally be in a good mood and it’s an ideal starting place. You could also call a family meeting either face-to-face or virtual or talk to each child separately. Consider the geography and complexity of people’s schedules. Some people find it helpful to prepare a script when speaking with family to explain the reason for the discussion. It can also be used during the meeting itself outlining the key messages you want to share.
3. Open The Discussion
Try these icebreakers:
o Mention you recently met with your financial planner about estate planning, and that you wanted to get started.
o Reference a recent life event such as an uncle’s death, a divorce, or a new baby.
o Share a story about a friend or neighbour’s experience and how you don’t want to be a burden.
o Share your thoughts about a family treasure or heirloom.
o You are thinking about how you can help family members in the future with mortgages, education, etc.
o Conversations around donating to charitable organizations making a difference or impact in their community or the world.
When it comes time to talk, start the first conversation off with easier topics such as your values and financial lessons learned.
4. Talk About Your Assets
Most likely, your kids will have a general idea of your assets and net worth. While it is not necessary to disclose details, it is helpful for your children to understand what they can expect to inherit as it helps with their own financial planning. That way, they will know if they need to budget for their children’s education, or if they can retire early. Keep in mind asset values can change over time; especially with unforeseen events like medical costs, unexpected trips, or making your home wheelchair friendly.
5. Relay Your Wishes
This is where we dive into the more personal aspects of your estate plan. As your conversations develop over time, here are some things you will want to relay to your family members:
o Outline your priorities around the next stage of your life such as long-term care needs, downsizing, and other lifestyle challenges.
o Discuss your choice of executor and what their responsibilities would be. Ensure you get their consent first. If you can’t find a willing family member, consider hiring a firm such as Clear Estate instead.
o Talk about choosing someone to be your Power of Attorney for all financial matters should you be unable to make financial decisions.
o Discuss what is in your will including the beneficiaries/distribution of assets.
o Let them know your burial or cremation preferences, the location, format as well as whom you would like to see at your memorial service.
o If you have a plan to cover funeral expenses, be sure to share those details with your family.
o Be transparent about any unequal distribution and the reasons why. Stay organized. Keep notes from each conversation. To help make sure key items aren't missed, maintain this Will Checklist.
6. Meet With the Professionals
Once you have decided on the various roles, it’s time to meet with the professionals and prepare your estate documents.
o Lawyer or Notary Public to prepare the will, POA, and Representation Agreement.
o Schedule a meeting with your financial planner and family members so everyone understands the vision and what is expected of them.
o Provide your financial planner with a copy of all the estate documents.
o Let everyone know where to find all your estate documents and provide them with the contact details of all the professionals involved: lawyer, accountant, financial planner, trust advisor, bank manager, business partner, etc.
Estate plans are not drafted overnight. As you work through the process, think about outlining goals for every meeting as you go along to build trust and open communication. Be upfront and candid throughout your discussions. The most important thing – get the convo started!