If you have taken the steps to prepare an estate plan, or are planning to, it is advisable to take the next step and inform your adult children of the details of your intentions.
How much of the estate plan details, with regard to the monetary amount of inheritance is up to you to decide, and in some circumstances may not be necessary to reveal, but other common estate planning factors specifically pertaining to who is involved and potential end-of-life issues are a must.
What to Tell your Kids about your Estate Plan
What is Included in an Estate Plan
A properly drafted estate plan not only handles provisions for your estate, which determines who your heirs are and what assets they will specifically inherit, but it also lays out other end-of-life considerations. And regardless of the size of your estate, you should establish a Revocable Living Trust prior to your death in order to avoid probate.
Estate plans, however, deal with more than just inheritance, money and other assets you’re leaving behind.
Within an estate plan, you should also have your Advanced Directives prepared, which are legal documents that outline your wishes for your financial and health care decisions should you become incapacitated or pass away. These documents include;
- Durable Power of Attorney: A legal document allowing you to appoint a trusted agent to act on your behalf to make decisions about your property, finances and legal issues.
- Health Care Proxy: Allows you to appoint someone you trust to make healthcare decisions and carry out your wishes in the event you lose the ability to make those decisions yourself.
- Living Will: A written statement that shares your health care wishes in regard to end-of life care, and specific instructions about treatments you may or may not want.
What and Why your Adult Children Need to Know about your Estate Plan
If you are considering an adult child to serve as one of these agents, it is strongly encouraged that you inform them of this decision right away and share your wishes. If health care issues should suddenly arise it would be difficult for them to properly respond to their newly appointed duties without knowing what your wishes are. In the time of a health care crisis, these legal documents will need to be provided to financial and medical institutions and your child will need to be made aware of their location. Additionally, in this day in age of electronic payments, you will need to provide your children access to your passwords to ensure they will be able to continue to pay your bills or renew policies. Without communicating these details in advance, your children may be left with a difficult puzzle to solve amidst the possible crisis of dealing with an ill parent.
With regards to the financial inheritance side, adult children, especially if you plan to have multiple beneficiaries, should be made aware that there is a plan in place. It may not be necessary to share the actual amounts, but knowing that they are in line to potentially inherit may help guide them as they prepare for their own short term and long term financial goals.
And possibly, the most important reason to share with your child is to provide them with peace of mind. As difficult as the topics of aging, illness and death may be to discuss, just knowing that you have the necessary plans in place to provide for yourself in your later years may ultimately be the best gift a parent can give.
To find out more about planning your estate, contact Tully Law Group at 631-424-2800 to set up a free consultation.