In this Wealth Planning Update:
Ask any parent—no matter the age of their children, their accomplishments, or the fact that they have started their own family—their child is still their child. For that reason there are sensitive and personal topics many parents haven’t discussed with them, specifically information about their finances, wishes for care as they age, and estate plans.
You may find estate planning a difficult subject to address, and you may find it equally as difficult to discuss with your children. You may not wish to burden them or find that talk of your medical and estate decisions is uncomfortable. Maybe you don’t feel comfortable sharing many details since you don’t know how the information will be interpreted. But for your wishes to be carried out, as well as for your children to be equipped with the right amount of knowledge to allow them to make decisions impacting their financial future, it is a good idea to broach these subjects with them. Regardless of whether you wish to divulge every detail, you should consider sharing certain basic financial and legal information with your adult children.
Basic Documents to Share
There are three documents that you should work with your legal professional to create no matter the status of your financial or family situation. Once in place, you can share who has been appointed to represent your estate and your interests in these documents and where they can be found. These documents are:
Topics to Discuss
The Impact of Your Estate
Although federal and state estate tax laws are based on taking care of the surviving spouse, many people want to leave their children an inheritance. What constitutes a thoughtful estate plan?
A good estate plan is attentive to the financial elements involved in transferring assets and the emotional elements the transfer entails. The emotional component is important because, although we may not like to admit it, money talks. It is important to ask yourself what you want the money to say to your children. When you are planning for the distribution of an estate, you should consider the potential strains on family harmony.
Similar to the importance of letting your children know about your finances, it is important to tell them about your estate plan so they can plan for their future more effectively. Communicating your estate plan can be done effectively without sharing how much you plan to leave to your children. It is most significant to share the goals behind your plan along with the structure (how assets will flow at your death). For example, if children are expecting to inherit the family business, it is important to know what provisions you have made, especially if some are active in the business and others are not. Perhaps you are planning to leave part of your estate to your second spouse or a charity. Whatever the situation, sharing this information can be beneficial to all parties.
Talking about financial matters and subjects dealing with one’s passing is difficult for all involved, but the knowledge and increased security that family members can gain by having these discussions will likely far outweigh the discomfort.
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The information and opinions in this report were prepared by Wells Fargo Wealth Management. Information and opinions have been obtained or derived from sources we consider reliable, but we cannot guarantee their accuracy or completeness. Opinions represent Wells Fargo Wealth Management’s opinion as of the date of this report and are for general information purposes only. Wells Fargo Wealth Management does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
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