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Money and Life
(Financial Planning Association of Australia)
No one likes unpleasant surprises. Talking about your Will with your family can be stressful, but it can also help to avoid a worse situation when you are gone.
Contemplating one’s own death can be hard and in many families, talking about money or inheritances is taboo. Some parents worry that letting their children know how much they stand to inherit may cause a sense of entitlement or encourage them to become less productive. Others fear the chat could stir up jealousies, insecurities and feuds among family members.
But no matter how stressful that conversation is, not talking about what’s in your Will could cause confusion, bitterness, far bigger family feuds and even legal battles after you’re gone.
Having a transparent and open talk about its contents could help your family understand the reasons behind your decisions and ensure their expectations are realistic. It can also reduce their anxiety. After all, it’s often the unknown that stresses us the most.
The talk may also allow you to express any special wishes you have that are not specifically included in your Will. And, you may gain better insight into what different family members value and want. A conversation about your finances and wishes will help to clarify who to contact, and how to pay for basic expenses, as well as your funeral, when you pass.
One of the most contentious aspects of settling an estate can be the distribution of personal property like family jewellery, art or special collections, whether worth a lot or just of sentimental value.
Here are five ways to reduce the stress of these conversations:
#1: Identify potential hotspots
Think very carefully about what you plan to do with your assets and why. Do your research and speak to your lawyer about what’s possible and what’s not. Identify areas that could be touchy subjects.
For example, do you have a child you plan to leave more to than others? This could be because that child has a disability requires additional financial assistance or because that child is a single mother on a low income, whereas her sister is a lawyer married into a wealthy family.
Are you planning to make certain arrangements to protect your heirs? Perhaps one has a drug problem or can’t manage his or her financial affairs very well. Or, another is in a rocky marriage and you don’t want your hard-earned money being split with that child’s spouse.
It’s important to plan how you will broach these topics in your discussion with your family, if at all.
Giving good reasons for these decisions and getting buy-in now from everyone could avert problems later on, if they only hear about your plans when you are gone.
#2: Have a game plan
Decide whether you want to talk to each child separately, rather than addressing everyone as a group. If you choose the group route, will it be one discussion or a series of discussions?
Consider who should be involved in these meetings. In addition to your adult children, should you include adult or teenage grandchildren? Should spouses also be invited?
Proper planning can go a long way to keeping peace. Before the talk, determine the goals and objectives you want to achieve from the discussion. Draw up a meeting agenda and some talking points.
Chose a neutral venue for the chat, one that will make everyone feel comfortable and secure.
Consider having your solicitor, accountant or a trusted family elder or friend at the meeting – someone who could step in if things get heated and steer the discussion back on track.
Carefully explain why you have made the choices you have, especially if you are leaving more to one child than another or if you want sentimental items to go to specific people. Simple explanations can go a long way towards avoiding bad feelings.
Explain the principles, history and values behind your decisions. Let family members ask questions and provide feedback on your plans.
Listen and be open. Give everyone a chance to express their views. This will encourage a healthy dialogue and a common understanding of what different family members want.
#4: Keep the peace
Speak in a calming tone. Don’t shut down or lash out if things aren’t going the way you want.
Remember that talking about your passing can be a very emotional conversation for your children.
Try to stay focused on the topic at hand and not let other family issues get in the way. Remind everyone that relationships matter more than money and things.
No matter what is said, you have the power to choose how you would like your assets distributed. If a family member doesn’t agree with you, let them know they have been heard, but don’t feel pressured to change your plan.
#5: Follow up
After the discussion, draft a simple summary of your estate plans and distribute it to your heirs for final input. This draft could also include information such as where your important financial documents are located and what you’d like for your funeral.
It’s important to ensure that everyone has understood what was discussed and is one the same page.
Still think that a conversation with your loved ones about your Will is too uncomfortable and troublesome? Start by writing a letter to share your thoughts, reasons and wishes. Maybe you could even film yourself reading out. And remember while the conversation might be based around money, it’s really about values.