Since an estate plan largely focuses on financial details, many people assume that it should be private. Just as it is not considered polite to ask someone how much they make in a year, family members do not want to pry into someone else's personal business. An elderly person may see no reason to tell heirs exactly what the estate will leave to them.
However, if you are doing your estate planning, you should know that it is actually quite beneficial to open this type of dialogue with your heirs. This information does not have to stay personal. After all, a major goal of estate planning is to pass that wealth to your heirs, so it can help to involve them in this process. Some benefits of communication include:
- Creating a responsible plan for how your heirs will use the money and assets they receive. Parents often worry that their heirs will simply squander their wealth, but the estate plan can be crafted to prevent it.
- Working together to define your financial legacy. You have a philosophy for how you handle money already, but it can help to work with your heirs to create a family philosophy that can work from one generation to the next.
- Reducing the odds of an estate dispute. Talking to your heirs in advance gives them a chance to offer feedback and help you create a plan that everyone approves of. Plus, your heirs will have realistic expectations, which can also lower the odds of a dispute because there are no surprises.