Why and how to talk about inheritance with your family

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By Colleen Hasey Schuhmann, CRPC Special to The Pineapple One of the insights we gained from a compelling UBS Investor Watch report on the subject was that, changing the way families view inheritance can have a significant and positive impact both on benefactors like you and on your heirs. When parents include their children in their inheritance plans, families are much happier with the outcomes. And nine out of ten heirs report being highly satisfied when they know the details ahead of time. A tough conversation to have Despite these facts, neither benefactors nor heirs feel comfortable having this difficult conversation. You may be familiar with the emotional barriers on both sides. Benefactors, who may be living active, comfortable lives, often feel inheritance is not a pressing issue. They may also not want their heirs to count on an inheritance. Heirs, on the other hand, may feel that it’s inappropriate to discuss their parents’ money and don’t want to appear greedy. But both parties agree on one thing: It’s the benefactor’s responsibility to start the conversation. Planning can make the difference We believe that the desire on all sides to have a more open dialogue about inheritance can be fulfilled by discussing the subject within the broader context of financial planning— especially longevity planning. People are living longer and living in better health. They now recognize the need to plan for the years ahead, including healthcare, long-term care and how they will pass on their wealth. When considered as part of financial planning and overall wealth transfer, the subject of inheritance can take its place alongside other types of decisions that families make together, with everyone’s wishes and needs addressed. The conclusion we draw from the research is clear: Your loved ones want you to start inheritance planning early and include them in the conversation. We can be a valuable neutral party to help you and your family open the lines of communication. We can work with you on the advanced planning that can help ensure a smooth transfer of wealth and avoid future conflict among your heirs. How we can help There is no “typical” way to have a family conversation about inheritance. But you should be prepared to discuss specific subjects and review specific financial information. We can guide you in this and help structure and even lead a family meeting to address these issues in terms of your unique family situation. Here are some of the issues you may consider: Emotional factors. Families don’t always like to talk about money. Some benefactors feel that letting their children know about the wealth they’ll receive one day may dampen their initiative or give them a sense of entitlement. Other benefactors want to enjoy their money, without feeling judged about how they spend it. And, children often find it awkward to discuss their parents’ wealth. But families who discuss this early, are happier than those who don’t. When was the last time you reviewed your will or estate plan? It’s important that you keep your will current to reflect any changes that have taken place in recent years. Does your spouse understand your estate plan? We’ve found that typically only one spouse handles the planning. But it’s important that you both know the overall plan and objectives, before you start talking to your children. Have you discussed your plans with your children? Knowing what to expect ahead of time can prevent hard feelings during a difficult time. Our research reveals that when families have knowledge about the estate plan up front, there’s a 50% drop in disagreements when a loved one passes. Is there anything you want to do today to help your heirs? You may want to help a child purchase a home, or you could set up 529 college savings plans for your grandchildren. We call that “giving while living.” We can also discuss how to balance this desire with the need to retain enough resources to maintain your lifestyle given today’s longer average lifespans. It’s all part of a comprehensive wealth management plan. If you’re worried that your children are inexperienced and naïve about money and investing, we can also spend some time educating them about financial matters and how to be responsible with wealth. We can have an initial family conversation without talking about specific amounts. We’ll focus on helping your family understand your wishes and how you have structured your estate plan to support those wishes. Keep the conversation going Our experience—and that of clients like you—shows that it’s important to start the inheritance conversation now, and keep it going on a regular basis. We can play an important role—planning, leading and taking part in your family meeting on this topic. At the same time, we’ll be working with you to understand the issues you face, and providing insights and guidance to help you achieve your financial goals, throughout your lifetime and beyond. To read the latest Investor Watch, go to ubs.com/investorwatch. Colleen Hasey Schuhmann, CRPC, is Vice President – Wealth Management at UBS Financial Services in Boca Raton. Colleen also serves on the Board of the Delray Beach Library. She specializes in all facets of your financial life, including retirement planning, portfolio management, life insurance and long term care planning, and estate planning strategies. For more information, please contact Colleen directly at 561-367-1817.