Clients often ask us what they should tell their family about their estate plan. While you have no legal obligation to tell them anything, giving them some information can minimize stress, effort, and costs down the road. In some cases, having the discussion can avoid disputes in the future.
We typically recommend making your family aware of your estate plan, at least generally. For instance, advising your heirs of what documents you have in place, and where they are located, can make the process of administering your estate (or assisting you if you became incapacitated) much easier. For example, if you became incapacitated and the agent you designated in your power of attorney or health care proxy does not have a copy of that document or know it whereabouts, the benefit of having put together an estate plan could be lost. Your agents may have an immediate need to act on your behalf, but be hampered by the lack of information you provided.
Informing the rest of your heirs or immediate family members whom you have appointed as your agent can sometimes avoid disputes. The incapacity of a loved one can be a very stressful time. Learning in the middle of a crisis that a parent selected a different child as agent can cause anger and resentment. By making your choice clear and transparent ahead of time, some of that anger and resentment may subside.
How much you wish to tell your family about more detailed aspects such as your inheritance plan is more nuanced. For example, if you have multiple children and all are being treated equally, telling them about your intention may provide assurances and comfort. If the inheritance is not equal, or you selected one person over another as executor, explaining your reasoning to them can sometimes reduce the chance of a disputes after your incapacity or death. On the other hand, it could lead to a serious family dispute while you are alive. Every family is different, but having a frank discussion with your heirs about your plan may be helpful in the long run. Another alternative is to leave a handwritten and signed note, which is separate and apart from your Will and Trust, which explains to the disadvantaged child why your inheritance plan reads as it does. This note can be given to the disadvantaged child after your death and potentially help avoid litigation.
In addition, leaving an updated list of assets, liabilities, and other financial information will also give them a head start. Often, the estate administration process is delayed or made more difficult because the family has little to no information of the deceased’s finances. Similarly, if you become incapacitated and your agent has to step in and pay your bills, it would be very helpful if the agent has, or can at least locate, a list that includes items such as where your bank accounts are, what credit cards you have, what insurance policies you have, etc. For those who prepare their estate plan with us, we provide them with a Letter of Last Instruction, which they can fill in with that type of information.
If done properly, your estate plan is something you have put great consideration, time, and effort into putting together. Your family should benefit from those efforts, You should consider telling your family about your estate plan, at least generally. Taking the above steps can make the process of handling your affairs much easier, less stressful, and may even avoid disputes.