Does Your Family Know About Your Estate Plan?

A Guide for How Much to Share and With Whom

It’s the thick of tax season and you’ve probably been working on (or finished) your tax returns. Most of us don’t feel comfortable sharing the details of our tax returns, unless we have to, say for a mortgage. But, your estate plan, an important part of having your affairs in order, is a bit different. You might be wondering whether or not your family should be acquainted with the details of your estate plan.
 
When it comes to their estate plan, many people are often confused about when and what to share with their family, so you’re not alone if you’re trying to decide what to do. There are several reasons for concern, ranging from worry over stirring up family tension to a concern that broaching the subject of powers of attorney and healthcare directives isn’t the sunniest of dinner table topics.
 
However, there are a number of benefits to letting your family know some of the key points covered in your plan, especially regarding your incapacity planning. If your family knows what your wishes are and understands how they’re expressed in your health care proxy and powers of attorney, they will be much more prepared to carry out those wishes if the need arises. Telling your family about your preferences in the event of incapacity will save them from encountering an extra level of stress and confusion.
 
While it’s by no means necessary that you share the entirety of your estate plan with your family, it doesn’t have to be an all-or-nothing decision. Here are a few different ways you might choose to get your family acquainted with your plan.
 

Option #1: Share everything with everyone

Total transparency is certainly an option, but it might not be the ideal choice depending on your family dynamics. This level of openness is usually only appropriate for you if you anticipate needing help soon or are already receiving help from your successor trustee and/or other agents. Consider what you would want to know if you were in your family members’ shoes. Too much information can be overwhelming, and could also lead to disputes between family members. However, too little information can cause misunderstandings, stress, and time delays when the time to act comes.
 

Option #2: Share the basics with everyone

Sometimes, sharing a summary rather than all the details is a simpler and more effective choice. If you’re going the summary route, talk about how your estate plan works or “flows” without including any information about the specific assets. For example, tell your family about the types of documents in your plan and the function each document serves so that your loved ones understand who will be in charge and the general manner of distribution and management of your assets. This might mean explaining the basics of how health care directives, powers of attorneys, and trusts work. We are always here to help you figure out how to best describe your plan in simple terms and may even be able to help you with a family meeting.
 

Option #3: Share your list of point people

Another route to take if you don’t want to divulge every detail of your plan is to simply share who you’ve “cast” in different roles in your plan. Let your family know who your trustees, executors, and health care agents are so there are no surprises later on and so they know who to look to, when the time comes. If you sign a waiver with us, we can even be authorized to provide a copy of your documents upon your incapacity or death. This option will help prepare your family for the future without overwhelming them with the specifics. It can also help maintain a greater level of privacy for you.
 

Does your list need a checkup?

As you ponder how much to share with your family, seize this opportunity to review your “cast.” If you were re-doing your plan today, would you still select that person as successor trustee? Health care agent? Guardian for your children? Caretaker for your pets? Changes like these are fairly straightforward, but incredibly important to get done so your plan works as intended. If you have any questions or need to make changes, give us a call. We’re here to help.
 

The Practical Aspect of Sharing

If you intend to share the actual documents with your family, give us a call. We can work with you to provide paper or electronic copies to those family members that need them.

It’s possible that none of these options suit your family’s unique needs, and that’s perfectly fine. We can work with you to create a custom strategy. Let us know if we can help you develop your own family meeting agenda.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.