Should I Share My Estate Plan Details With My Family?
By having an estate plan, you are better prepared for what happens to your assets at your incapacity and at your death. You select fiduciaries such as an executor, trustee or attorney-in-fact to manage decisions that are supposed to be in your best interests and in the best interests of your beneficiaries. If you are like many, you might be inclined to select one or more of your family members to fill these fiduciary roles, in which case those family members might be privy to certain aspects of your estate plan. Alternatively, you might make an estate plan for your family’s benefit without them knowing about the plan until after you die. The question that Hawkins Elder Law addresses in this article is whether and to what extent you should break the news about your estate plan to your family.
Why Shouldn’t You Speak With Your Family About Your Estate Plan?
You may not want to disclose to your spouse or children how much they stand to inherit from you because you do not want their anticipation of an inheritance to interfere with their work ethic or their will to be a productive member of society. Put more simply, you don’t want your family members mooching off of you. Another reason for keeping your estate plan private is that you have earmarked assets for some of your family members but not for others, and you don’t want to cause family discord by letting certain family members know that they have been (or might be) cut out. Moreover, if you let one of your family members know that you selected them as a fiduciary when other family members have not been selected, and those non-fiduciary family members find out while you are alive, then this could create strain in their relationships with you and each other.
Why Should You Speak With Your Family About Your Estate Plan?
One key reason for discussing your estate plan with your family is to explain why you did what you did, which could make all the difference. In other words, you have an opportunity to make your intentions clear at a time when you are alive. After all, if your family stands to inherit something from you, then they will find out eventually. Plus, if you have made arrangements which might be difficult for them to understand, then they will surely have a more difficult time if you are not around to explain your rationale for making those arrangements.
For example, you might have plans to benefit your children of your current spouse more than your children of your former spouse to offset the benefits that you already provided to your children of your former spouse. If your rationale is not made known to your children of your former spouse, then what would lead them to believe that they haven’t been slighted by you? Alternatively, suppose that you have designated a limited amount of assets for your spouse’s benefit with the remainder of your assets going to your children in equal shares. If your spouse does not discover these restrictions on their access to your assets until after your death, then what is to stop them from concluding that you have treated them unfairly?
For this reason, if you don’t explain at least some details regarding your estate plan to those affected by it, you might not have an opportunity to express your good intentions as to your decisions, which might increase the risk of tension and litigation in your family. Significantly, if you explain to affected family members why you have restricted or eliminated them as a beneficiary, and they have a problem with it, then you would at least be in a position to address this before it turns into a more serious problem.
You Can Enable Your Children To Better Understand Your Assets And What To Do With Them
You probably do not want your family members being surprised to learn at your death that you held certain types of assets including business interests. Rather, it makes sense to speak with your family members about these assets while you are alive so that they better understand them and they know what to do if they receive them. Notably, if you have business interests, then there might be a lot of decisions that need to be made as far as succession planning and estate planning goes. If your children stand to receive your business interests but don’t know about them until you die, then they might be unsure as to the value or operations of the business. Even worse, they might be inclined to sell the business for less than it is worth. Perhaps you want someone in your family to continue the business. By letting them know this when you are alive, you could implement a succession plan and give them a head start as to how to manage the business and keep it afloat.
You Can Condition Your Benefits To Your Children
Trusts are legal arrangements where a person known as a trustee holds property for the benefit of one or more beneficiaries. You can customize trusts to fit your specific needs and to address a variety of concerns about your beneficiaries. Perhaps one of your children has a problem with keeping a job, managing money, refraining from drugs or alcohol, or is otherwise prone to lawsuits. Understandably, you may not want this child to freely get their hands on your money without strings attached.
A possible solution is to have the share which is set aside for that child placed into a trust in which a trustee only distributes assets to that child if certain conditions are met such as the child keeping a job for a specified period of time or by submitting to drug testing or counseling. You can arrange for your trustee to only distribute a certain portion of assets from time to time as a way of maintaining and growing assets in the trust for their future benefit.
By telling your family members about restrictions that will be placed on their inheritance, then they will know that you meant to incorporate these restrictions and that their inheritance will not be so freely accessible. This could encourage them to make the types of positive changes sooner rather than later.
What Should You Do Now?
While you are alive, it makes sense for you to disclose at least some information regarding your estate plan with those of your family members who stand to benefit from it. You could do this by communicating with your family members all at once; however, it could make more sense to discuss it with each family member privately as each of them may have varying levels of knowledge regarding your estate plan and they might have unique concerns that they wish to address with you.
Also, in disclosing your estate plan to your family members, you might be surprised to learn that one or more of them has no interest in being your fiduciary, which is obviously better for you to know now so that you can make the appropriate adjustments such as selecting another family member or even a third party to be your fiduciary. Relatedly, you might bring in a third party instead of your family members if you get the sense that there will be family strife as a result of you selecting some of your family members as your fiduciaries but not others.
Of course, one of the best things that you can do now is touch base with an estate planning attorney who is not only keen on estate planning strategies that might fit your needs, but who can also help you convey information to your family in a way in which it can be best received. You worked hard in life to acquire the assets that you own. The last thing you want is for your family to fight over your assets. This is all avoidable through careful estate planning.
For more than two decades, the attorneys at Hawkins Elder Law have helped countless clients with preparing estate plans that are tailored to their needs and which provide for the effective management and distribution of their assets. Founders Jennifer J. Hawkins and Jeff R. Hawkins are Board Certified Indiana Trust and Estate Lawyers, certified by the Trust and Estate Specialty Board. Reach out to Hawkins Elder Law today by calling (812) 268-8777 or by contacting us online.
About the Authors
Jeff R. Hawkins and Jennifer J. Hawkins co-author the Hawkins Elder Law blog with Thomas E. Hynes, a lawyer who is admitted in Pennsylvania, New Jersey and Florida with a background in estate planning and elder law.
Jeff and Jennifer Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers. They are also active members of the Indiana State Bar Association and National Academy of Elder Law Attorneys. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois.
Jeff is a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation. He is also a member of the Illinois State Bar Association and the Indiana Association of Mediators. He served as the 2014-15 President of the Indiana State Bar Association, and he is a registered civil mediator.
Hawkins Elder Law is one of the few elder law firms that Martindale-HubbellTM has rated AV Preeminent, with both of the firm’s lawyers (Jeff Hawkins and Jennifer Hawkins) also rated AV Preeminent.
More Information
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