As an advisor, helping clients plan for their future is one of the most rewarding aspects of my job. The conversations focusing around living our lives – college education planning, home upgrades, major purchases, or retirement – are pleasant, exciting, and important. Conversations about aging and death, although equally important, can be difficult for my clients and their children.
Even though they can be uncomfortable, “end of life” conversations are essential to ensuring our affairs are settled according to our wishes and without family conflicts in the event of our incapacitation or death.
Preserving family unity while leaving a legacy are the top two priorities I hear most often from my clients when discussing wealth transition to their heirs. Based on my experience as a financial advisor, communication is key in helping to ensure both goals are reached. So, how do we begin a conversation that has the potential to make both sides anxious and uneasy?
In this advisor article, I want to share some tips about how to have the legacy conversation with your adult children to ensure your wishes are fulfilled, while giving your kids peace of mind about the future.
Tell Them Your Story
When approaching the legacy conversation with your children, start the process with some personal storytelling. Talk candidly about your life story and what has been most impactful and transformative in your life. This will help your family gain valuable insight into what has shaped your morals, aspirations, and decisions. Remember: your legacy isn’t just money and assets, but also the personal values and perspectives you hold in high regard.
Consider starting with where and how you grew up. Include who your mentors were and why. What were some of your successes and failures, and what led to each outcome? What did you learn in the process? What are your hopes and dreams for your heirs after you’re gone? Encourage an open and engaging dialogue with your children and be willing to answer their questions. The source of most conflict is the unknown. When your family understands what you have chosen to do and why, this can help diffuse any controversy, distrust, or angst.
Your children don’t have to agree with your decisions (it is your legacy ), but their awareness of your wishes can help prevent future squabbling.
Share Your Important Contacts & Documents
The next question my clients often have when preparing for the legacy conversation with their adult children is “What important information do I tell them?”
To help you, here’s a general list of information at least one of your adult children should know to help ensure your wishes are fulfilled in the event of your incapacitation or death:
· Your essential contacts, including your attorney, accountant, financial advisor, banking institution, insurance agent, and any other trusted professionals you work with
· Your wishes for long-term care, if needed, and how it will be funded
· Your healthcare directive and the name of your proxy
· The name of your power of attorney
· Your funeral wishes about burial or cremation
· Your will or trust, with as up-to-date information as possible, in case there are changes to laws or your personal circumstances
· Your beneficiary designations on your financial accounts
This last point about designated beneficiaries is very important, as named account beneficiaries supersede your will and pass to your heirs outside of probate. Additionally, if you don’t have a valid will or other legally enforceable means of transferring your property, the state will determine how your estate is settled. This may not align with your personal goals, so it’s imperative that you have at least one person in the boat with you should something happen to you unexpectedly.
What to Do If They Approach You
Your kids may reach out first to ask about your wishes. If they do, consider this a wonderful gift. Give them credit for initiating the conversation, because this is tough stuff to talk about. Take a deep breath and answer their questions openly and honestly, to give them what they need to help carry out your wishes.
We’re Here to Help
If the task of creating a financial plan for your legacy feels daunting and you don’t know where to begin, please reach out to our experienced financial advisors at TruStone Wealth Management. We work with a large network of other professionals and are happy to be a part of the team that will guide you through this essential process.
No one is too young or old, wealthy or not, to be without a plan for the future. We want to help you make sure that what is important to you, and what you have worked hard for, creates the legacy you have dreamed of for generations to come.
I'm here to help you feel more confident about your financial future.
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