A few years ago I presented an Estate Planning Program to employees of the Wall Street Journal. Most of these people were rapidly approaching retirement, and by now, they probably are retired.
They were all very interested in planning for their future, but there was one special attendee who was a writer for the Journal. A couple weeks after the presentation, I read his article in the Wall Street Journal about the importance of planning to save taxes, avoid probate, protect assets for long-term care situations, and generally to do estate planning for the right reason, that is to ensure that funds and assets will pass to the appropriate parties at the appropriate times. The article went on to explain the need for all of the important documents, planning and obtaining good counsel for the plan. However, toward the end of the article, the author talked about the importance of discussing the plan with his parents, but since he could not discuss this issue with them personally, he merely stated that he hoped they were reading the article.
My recommendation to many of my clients is to not discuss all of the details of their plan with their children, but to make sure that the kids have a complete and accurate picture of their assets all in one place. This includes copies of bank statements, financial records, life insurance policies, tax returns, etc.
Many people don’t want to make this information available to their children now, but they should at least tell their kids where their important papers are and who is in charge, such as their financial advisor, insurance agent, lawyer, accountant, banker, trust officer, etc. If they don’t do this, their kids will spend a significant portion of their time when their parents either become incapacitated or die, searching for all of the information. Your children will also need access passwords to get information that may be stored on your computer.
In your case, you may have an open family relationship and be willing to discuss planning issues with your children. This includes not only end of life decisions such as life support, organ donation and funeral arrangements, but also discussion about who may be in charge of making financial, medical, and other decisions in the event of your incapacity or death. Although this may lead to the opening of Pandora’s Box and causing family disharmony when children who think they should be in charge find out that they are not, at least all parties within the family will be educated about what you want and what plan has been prepared.
If you are not interested in sharing all of this private information, you may provide a list of items and where the documents are kept, where safe deposit boxes are and located, where the keys are maintained, where passports, veteran’s administration documentation, medical insurance cards, and other important information is maintained. At least then, if there is an emergency, someone will have access to this information, whether it be your child, a trusted advisor, your lawyer or another family member.
Frequently, after a plan is completed in our office, the parents wish a full disclosure to be made (possibly not about all assets,) but about the plan itself, and they want to share the plan with their children. We may consider having an open family discussion with some children being present in the office and some available by conference call or video conferencing in order to allow the entire family to be informed as to the client’s intentions. This serves the purpose of educating all parties so that they will know the intent, goals and objectives of their parents, while at the same time “clearing the air” of any misinformation that may have been implied or presented to any party in the past. If a child asks a question that a parent is not willing to answer, the issue is delicately averted if that is my client’s desired result.
By: Hyman G. Darling, Esq.
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