Preventing future strife: make estate  planning a family affair

Estate plans usually focus on the “what/when/how/whom,” but the “why” can be just as important.
Shakespeare’s King Lear divided up his kingdom while he was still healthy in body and mind—making his wishes clear to the assembled daughters so that “future strife may be prevented now.”
Sadly, I’ve seen a fair amount of strife among family members who were caught off guard by a deceased parent’s will—strife that might otherwise have been prevented with some careful estate planning.
Documents such as wills and trusts are written in cold, sometimes impenetrable legalese. Unless a personal letter is attached, explaining the rationale behind the terms and conditions, beneficiaries can wind up feeling hurt or confused as to the intentions of the deceased.

Carving up your kingdom

Your estate may be less than kingly but if you own any assets at all, you have a royal duty to focus on how they are to be distributed on your death—what stuff goes to whom, and when, and how.
Once you’ve decided on all that, it’s a good idea to share your wishes with your family, preferably in person. That way you’ll have an opportunity to answer their questions and to explain the logic behind certain provisions.
Such as, why you want your child’s inheritance to go into a trust they can’t access until age 30. Measures are frequently put in place for the protection of your child or dependent, not because you don’t trust them. A trust can contain a framework to help protect assets for your child, to promote certain values or to safeguard the trustee in some way. However, don’t take it for granted that he or she will know why you set the conditions you did.

Divesting yourself of rule

Sometimes a business goes defunct after the owner dies; sometimes it passes on to the next generation. If you own a family business, and like Lear, need to divest yourself of rule, your estate planning concerns are compounded.
By dividing your business into equal shares for each child, you may be giving too much control to someone without business knowledge. It is unrealistic to assume that your children all have the same interest in, or aptitude for, running a small corporation.

When conversation is just too difficult

I’ve had clients who for various reasons were averse to sharing their net worth with their kids. If you are similarly reticent, you may at least share the basic provisions, information on how to access your assets, and how they will be distributed, though you may choose not to disclose their value. A common mistake is failing to put someone else’s name on your safe deposit box, the place we keep all those important documents like wills. Likewise, assigning a contact person for each account, so someone knows, for example, where your life insurance assets are held. You may also consider passing on this information to your agent named under a power of attorney.
If your children are still young, conversations about your legacy may not be appropriate. As the mother of young children, I have elected guardians for them in the event both my husband and I die, and have spoken to those guardians about the distribution of our assets. What we have discussed with the kids is where they would like to live if anything happens to us.
King Lear famously disinherits his favorite daughter at the start of the play, an extreme example of strife in estate planning. Even if your will does not contain any dramatic surprises, your family members may feel more secure if they know what to expect after your passing. Dealing with an unexpected or ambiguous provision—or worse, the confusion of having no will at all—can strike a double blow in the aftermath of losing a loved one.
A few words on paper, or better yet, in person, can avert potential discord.
Teachers Insurance and Annuity Association of America has sponsored Ask the Expert posts for informational purposes only. Many of the experts are unaffiliated with Teachers Insurance and Annuity Association of America, College Retirement Equities Fund, and their affiliates and subsidiaries (collectively TIAA), and TIAA makes no representations regarding the accuracy or completeness of any information on the posts or otherwise made available by the experts. Statements of external featured experts are solely their own and are not endorsed or recommended by TIAA.
Responses from experts to questions posed by Woman2Woman community members are intentionally general in nature and are not intended to give personal, financial, or specific advice. Some strategies are complex, and more information is often needed to determine the personal needs of a community member. We strongly recommend that you consult with a financial advisor before taking any action based on an expertʼs opinion or other information you obtain from the Woman2Woman:Financial Living site so that all of your personal circumstances can be taken into consideration. Participation in the site does not render the member a client of the expert or of TIAA.
This site is not designed to accept or respond to requests or complaints regarding specific TIAA accounts, products or services. If you wish to discuss an issue of that nature, please contact TIAA at 800-842-2252. TIAA is not responsible for any opinions provided by members of this site. TIAA is not responsible for the content or privacy policies of third-party sites to which you may link.
The TIAA group of companies does not offer tax or legal advice. You should consult an independent tax or legal advisor for advice based on your own particular circumstances.
The material and responses are for informational or educational purposes only and do not constitute a recommendation or investment advice in connection with a distribution, transfer or rollover, a purchase or sale of securities or other investment property, or the management of securities or other investments, including the development of an investment strategy or retention of an investment manager or advisor. The material and responses do not take into account any specific objectives or circumstances of any particular individual, or suggest any specific course of action. Investment decisions should be made in consultation with an investorʼs personal advisor based on the investorʼs own objectives and circumstances.
Experts may not have medical or scientific training. Any information related to physical or emotional health is not intended to be used in place of a consultation with a physician.
TIAA is not responsible for the statements of community members. We may link to posts made by community members only to direct you to topics that may be of interest to you. This does not mean that we agree with the opinions of these community members. Their statements are solely their own and are not endorsed or recommended by TIAA.
October 27, 2017