How To Talk To Your Children About Estate Planning

Jun 25

When and how to prepare your children and loved ones for financial success after you’re gone.

It can be a difficult conversation to discuss financial responsibilities with your children after you pass away, especially if they are young. However, it’s an important conversation to have as it equips them with the knowledge and tools they need to take care of your final wishes and estate—and their financial stability—with confidence during a stressful time.

In this article we’ll discuss a few steps you can take to talk about estate planning with your children to protect your legacy, and leave your children with financial benefits for years to come.

Step 1: Make space for an open, positive conversation

Whether your children are littles ones or fully grown adults, talking about what happens once you pass is a challenging conversation. Make sure to plan the conversation when everyone is emotionally able and willing to participate. It’s best to not wait until a critical situation as emotions can run high.

Preface the estate planning conversation with a story about your family’s legacy, why, and how you built your estate for them (as well as your grandchildren) to enjoy. It’s not a bad idea to treat your children to lunch or dinner afterwards to lighten the mood and remind them that helping them be financially prepared is another way of showing your love for them.

Step 2: Walk your children through the estate planning steps and what role they will play

Estate planning can have as many or few steps as you desire. The goal in the end is to ensure that your children are ready to take on the financial responsibility of your estate with specific directions.

Let your children know how essential communication is when handling the details of your estate. Here are a few key roles your children could play when managing your estate:

Executor

The executor of your estate plan (which includes your will) is also known as the personal representative. This person is responsible for carrying out the instructions of your estate plan, including the following:

Protecting your estate property and paying any taxes or claims against your estate
Collecting and managing inventory of your property
Distributing property to your chosen beneficiaries

Trustee

The trustee of your estate manages the assets (i.e. savings accounts, land, stocks and more) of your revocable living trust, should you create one as a part of your estate plan. They are similar to the executor of your estate in that the trustee manages any property, pays any bills owed, and distributes assets to beneficiaries in your trust.

Beneficiary

The beneficiary (or beneficiaries) of your estate are the people who receive the assets from your revocable living trust or will.

These duties and roles may change over time, as they should, if your financial situation happens to change. Be sure to keep your estate plan updated and inform your children of any changes.

Step 3: Reach out to a Financial Professional for help

Because estate planning can involve gathering a moderate amount of financial information on your behalf, it might feel overwhelming to your children to manage it if they aren’t familiar with your finances.

This is where it could be beneficial to include a CPA or Financial Planner in your estate plan to help you and your loved ones to manage your inventory in a professional and timely manner.

Do you need help preparing your estate plan?

If you’re getting ready to talk with your children about estate planning and want stress-free, cohesive financial planning, we’re here to help.

Our Financial Planners are happy to guide you and your children through the steps of planning your estate and preserving your family legacy. Get started by booking your complimentary discovery call here.

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