"If you fail to plan, you are planning to fail." -Benjamin Franklin
Whatever your wealth transfer plan is, you should share your intentions with your family and/or other inheritors. If children are involved, bringing them into the process when they are younger can be beneficial, both in terms of teaching them how to think about money and to ensure that your plans and legacy are carried out per your intentions. But even with grown children, there's still no time like the present!
One thing that will help this process is consistent family meetings. Depending on your comfort level, the family meeting could be as simple as making sure that everyone knows where important documents and contact information for attorneys, accountants and financial planners are located. Those who wish to share more might consider discussing actual account values, investment philosophy, gifting strategies, and philanthropic goals and activities. As you gain confidence in your family meetings make sure you are thinking about the other items, such as an Ethical Will and Digital Assets. We hope this guideline will spur some aha moments!
Planning the Family Meetings
Ideally, the family meeting is an open forum where you can review your plan with family, allow individuals to speak up and voice their ideas, and address questions to avoid confusion later. A few tips to a successful family meeting include:
* Pick a date that overlaps with another family get together, such as the holidays or a vacation.
* Determine who should be involved ahead of time. Make sure the appropriate people are included and that conversations are kept confidential.
* Conduct the meeting as if it were a business meeting. Draft an agenda and try to avoid distractions.
* Keep family members accountable for their specific roles.
Location of Important Documents and Contact Information
Make sure the location of the will, and other important documents, is known to the appropriate people, particularly your executor. One of your executor's main duties is carrying out your final instructions for distributing property, according to the will. Your executor should also know how to contact your key advisors, such as your Financial Planner, CPA, and Estate Planning Attorney.
Have you thought about whether you want to be buried or cremated? What type of memorial service do you want to have? This is vital information that should be included in your will and communicated through the family meeting. If not, making these decisions for you will become an additional burden to family and friends during an already difficult time.
Consider creating an ethical will, which is a way to communicate important personal, nonmaterial matters to heirs. Some examples of topics you may consider include:
* Important family traditions
* Meaningful family or religious ceremonies
* Values that you wish to pass on to the next generation
* What you hope people will remember about you
* Your feelings that you might not have shared with others
* Your hopes for the future
You may want to specify who should and should not read the will, and you may want to prepare different versions for different family members.
Don't forget about your Digital Assets
The world we live in is increasingly digital. The definition of digital assets is constantly changing but commonly includes:
* Thumb drives and cloud storage
* Email passwords and history
* Account information and passwords for financial assets
* Photos, scrapbooks, music, videos
* Social media accounts
The Uniform Fiduciary Access to Digital Assets Act requires you to have specifically included a provision in your estate planning documents granting access to a third party. Make sure your intentions for digital assets are included in your estate plan. It is also important to familiarize pertinent family members with the breadth and complexity of your digital assets.
Depending on your situation and comfort level, consider some the following topics at future family meetings:
* Current value and makeup of the family portfolio.
* Estate planning documents that have been created and the purpose each document serves.
* Annual gifts and/or general living allowances. This can be a great way to help younger heirs build financial responsibility.
* Transitioning the family business. Which family members will be part of the business and are committed to its long-term success?
* Charitable initiatives you support currently and down the road. Getting family members involved in the research and recommendation of a charity is a great way to get them on board.
* Values around spending.
Starting the conversation with your heirs is the hardest part. Having a solid grasp of your feelings about money will help you create a tangible wealth transfer plan and make the conversation that much easier. Everyone's plan will be different and should include your family values, history, and goals and wishes for future generations. Communicating your plan, in its entirety, to the next generation is key in making your final wishes come true.