For many people, estate planning is both a private matter and a morbid topic – not something that parents and their adult children want to discuss. While having these conversations takes a lot of courage, they can help avoid surprises, lead to better financial planning and promote family harmony.
Families that speak freely about estate planning can sometimes address awkward situations that might arise, like the choice of the executor who is in charge of distributing assets after someone dies – or succession plans for a family business or the leaving of assets in trust.
While parents have no obligation to change an estate plan after hearing a child’s preferences, being upfront about what they plan can help avoid future disharmony.
How families handle delicate issues depends both on the particular circumstances and the personalities involved. Sometimes it is best to have a series of talks, rather than covering everything all at once. Alternatively, parents may talk to each child separately, rather than addressing them as a group. Sometimes adult children have good input if the parent is wanting to discuss options before finalising their estate plan.
A trickier situation involves adult children who notice signs of a parent’s mental decline. Once parents become incompetent, they lack the legal capacity to make binding commitments, so it is important to sign estate planning documents before that happens. But broaching the matter may cause insecurity in the parent. An easy opening is for the child to say: “I just did my own estate plan. Don’t you think you should update yours?”
Another is to convey a story about a friend’s parent who did not take the necessary measures and how much hardship was caused for those children.
Sometimes there is a fine line between being well-meaning and protecting your own inheritance. For that reason, our estate planning team insist that they have an opportunity to meet with the parent separately, even if a child provides transportation to the office.
The goal is to guard against the two most common grounds for contesting a will or trust. One is undue influence, which refers to efforts to coerce someone to sign estate planning documents that favor one beneficiary over others. Another is the argument that the client lacked capacity when signing the document.
Whilst it is easy to get frustrated with parents who do not put their affairs in order, keep in mind that having the conversation requires them to confront their mortality. For both parents and children, that can be a gigantic step.
Our Estate Planning team has over 40 years in the industry and with care and compassion will make the process of finalising an estate plan stress-free and easier. Call our office today on 1300 22 48 28 and let us help you.