When it comes to finances and estate planning, the question of how much to share with your children has many answers. For some families, money is just not something to talk about. Finances are private and held close. Some families are worried their children might be less incentivized to work if they knew how much they might inherit. Or, they worry about their children’s spouses. Other families are very open with their children about their finances.
How much to share with your children is a matter of preparing them, even in the most basic way, in case something was to happen. For example, where do you keep your important documents? Who is your attorney and investment advisor, and any other professional contacts who should be notified? If you have named one or more children as your health care agent or power of attorney, do they know that? Do they know what will be expected of them?
The next level may be a general summary of your assets and the basics of your estate plan, without the need to share dollar amounts. Who will be in charge of settling your affairs? How will your estate be distributed? Will there be gifts to charity or beneficiaries outside your immediate family? If family dynamics are an issue, avoiding surprises may also avoid legal conflicts.
If you are so inclined, you could think about inviting your children to a meeting with your estate planning attorney to review your estate plan together and give your children an opportunity to ask questions and voice their concerns. The estate planning attorney can also explain estate and gift tax, property tax issues, and provide a high-level review of the responsibilities of settling one’s affairs. The next meeting might be with your financial advisor. Depending on your comfort level, you might “open your books” completely, or the review may be a higher-level discussion of your investment and retirement accounts without detail. The important thing is building trust and a relationship for the future. Talking with your children may be a series of ongoing discussions rather than a single meeting. No matter what your family’s approach may be, the goal is to prepare your children for the future, without sharing more information than you are comfortable with.
Lisa C. Alexander, Esq.
JAKLE, ALEXANDER & PATTON, LLP
2001 Wilshire Blvd., Suite 420
Main Line: 310-395-6555