Parents may have the best intentions when dividing up assets among their children, but it’s easy to cause rifts between family members if it isn’t done right.
Financial and estate planners say parents often can head off problems while they are still alive by discussing the aims and intentions of their estate plans with their children. The key isn’t revealing dollar figures; rather, these conversations allow parents to set expectations for their children.
This isn’t a solution for all families. Many parents fear they will be opening a can of worms by even talking about estate plans. “They don’t want to initiate conversations with their children in the belief that an open discussion can give rise to more questions than maybe the parents want to answer,” says Nancy Hearne, partner in the personal wealth, estates and trusts practice division at Saul Ewing Arnstein & Lehr.
Brian Tees, managing principal at Ewing & Jones, specializing in estate planning and probate, says he errs on the side of parents speaking to their children about estate planning, but says he understands why parents decline to talk. Instead, he says some of his clients include side letters in their wills that aren’t part of the legal document, explaining their intentions.
“You get to provide some context. It’s a final message to that child,” he says.
No matter the size of a family’s wealth, parents should take care to limit strife. Here are three situations where problems are particularly likely to crop up.
• Trying to be fair when assets aren’t equally distributed
Parents who give more assets to one child over others may be able to limit misunderstandings if they…
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