Preserving Family Unity - Estate Planning, Ep #45

An estate plan is a crucial part of one’s financial plan, but most people don’t have one. Those who do have a plan likely need to make updates or changes. This episode of the One for the Money podcast discusses the impact of an estate plan on the family. In the tips, tricks, and strategies portion, I share a tip regarding legacy contacts for your smart devices.

In this episode...

The crucial estate plan [01:08]
Planning for the details [04:04]
Family matters [06:32]
Legacy contacts for smartphones [08:33]

Proactive unity

What happens when someone dies without an estate plan? The reality is that everyone does have an estate plan. Every state in the United States has a default plan, but it takes much longer and is much more expensive than necessary. There is one primary goal with estate planning: to preserve family unity.

When the last surviving parent or grandparent dies, money often creates tension among family members. Unfortunately, some prioritize their love for money over maintaining lifelong family relationships. My father and his family experienced this firsthand. We learned an important lesson from this experience - to prioritize our family’s well-being, having a comprehensive estate plan and regularly reviewing it is essential.

Review your plan with the right people

When it comes to estate planning, a general attorney may not be the best fit for expressing your exact wishes. While they can assist with avoiding probate, they may not take into account the preservation of your family’s relationships. Estate planning often involves filling out forms that may not fully capture your desires if the right questions aren’t asked.

For instance, let’s say that Mom promised her classic Volkswagen van to one son, while Dad promised it to their daughter. If the estate plan documents don’t clearly state who inherits the van, it can create family tension. Families often have disagreements over sentimental heirlooms, such as a piano or jewelry. It’s essential to consider how crucial family unity is to you after your passing. If it’s important, then you should take the time to discuss how to pass down heirlooms with your loved ones.

Communication

Communication can be an issue with the most basic estate plan. What if special needs children are involved or children who suffer from substance abuse? These complicated issues deserve attention. You need to communicate your wishes should you become incapacitated. What if you told your oldest child that you don’t want to be on life support, but your youngest isn’t aware of that fact and wants to believe that you might still recover? That’s why it’s not only critical to have a durable power of attorney but to communicate your wishes as well. You don’t want this to come up for the first time around your hospital bed. It’s not fair for the person left responsible to have to guess.

A financial planner is an excellent option to review your documents because the lawyer who drew up the plan will unlikely look at it again. Regularly review the decision makers regarding your healthcare directive and the trustee. Things change, and you may not want the person in charge now that you named previously. Family unity has a better chance with a well-written, executed, and communicated estate plan.

Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC.