Napoleon Bonaparte said that most battles are won or lost in the preparation stage, long before the first shot is fired.
MarketWatch’s recent article, “Breaking the taboo: How to prepare your heirs for your death” says that when it comes to retirement, 60s are the new 50s!
This is a critical lesson, when planning for your own death and the related issue of transitioning assets to your family. The majority of estates lose assets—as well as peace within the family—after a transition. That’s because the heirs were unprepared, they didn’t trust each other and communications fell apart.
This preparation should involve making heirs aware of the location of all important estate planning documents and financial assets. They should also have the contact info of your financial professionals and attorney. They should understand how the parents want to deal with end of life and incapacity issues. These are some important questions that will help you see, if your heirs are prepared:
- Do your children (and their spouses, if any) know your estate plan?
- Is there a plan to provide certain information sooner and other information at a later time?
- Has your family read your will and other estate planning documents?
- Does your family know the family’s net worth?
- Are your heirs in communication with your attorney, accountant, insurance advisers and investment advisor?
Family battles can easily happen when members don’t believe they’ve been given their fair share and weren’t part of the process. Although it’s important to treat family wealth as a private matter, it should not be private within the family. Good communication between parents and heirs can prevent many issues.
Attaining the optimal degree of knowledge-sharing and family involvement requires its own planning. Family values, as well as current and future goals, should be a part of the entire financial planning process. When done well, financial planning is about much more than investment management. The success of a family wealth transition plan depends on preparing the family for the transition of the family’s wealth and its values.
Reference: MarketWatch (March 7, 2019) “Breaking the taboo: How to prepare your heirs for your death”