Three Steps To Estate Planning Without The Family Friction

Learn why you may be able to retire earlier than you think.

  • This field is for validation purposes and should be left unchanged.

Three Steps To Estate Planning Without The Family Friction

One problem that frequently stems from the inheritance process is fractured relationships between siblings. Unfortunately, the common denominator in many of these situations is the parents’ estate plan.

Many parents revise their initial estate plans once their children become adults. Once revised, many estate plans are carefully designed to help efficiently transfer assets to the surviving spouse and eventually the adult children. Unfortunately, this process frequently does a poor job of preventing a serious problem that no parent would wish for.

What Causes Sibling Animosity?

Many things cause sibling animosity during the inheritance process. Common problems include lack of communication between siblings, which causes skepticism on how things are being handled. Others include failure to agree if and how property should be sold and maintained and failure to agree on who should be paying for the final expenses.

This shortlist certainly is far from all-encompassing, but hopefully, it helps you understand the plethora of issues that could occur. To try to prevent these problems, I advocate using a three-step process for estate planning.

Step 1: Hire The Right Estate Attorney
Consider obtaining your estate attorney by getting referrals from professionals who have a long history of seeing the aftermath of the estate plans created by various attorneys. The types of professionals who may be privy to this information can include financial advisors, wealth managers, and certified public accountants who have a long history of working with retirees.

Step 2: Create A Financial Overview
A well-made estate plan can go to great lengths to reduce the problems associated with estate planning, but it does nothing to help your beneficiaries determine what you own and where you own it. This financial overview should help to simplify the inheritance process for your executor, and it can help serve as the foundation for you and your executor to communicate openly with future beneficiaries to minimize skepticism that can occur when tasks are completed behind closed doors. Your inventory should include, at a minimum, the following items:

  • A list of all assets, liabilities, and insurance policies you have, including how each of these is titled and who the beneficiaries are.
  • Contact information for all financial, insurance, and legal professionals you have relationships with.
  • Usernames and passwords for any websites your beneficiaries may need to access.
  • A legacy letter designed to communicate nonfinancial items that you want to impart to your children.

Step 3: Schedule A Family Meeting
Once your estate plan and financial overview have been completed, it is time for the family meeting. The family meeting can be done with the parents and all of the children inheriting assets. Some areas to cover at this meeting include:

  • Outlining the basics of your estate intentions.
  • Making sure at least one trusted person understands where your important estate documents are located.
  • Explaining who your executor and other involved people will be and why.
  • Making sure that all parties understand the importance of communication and transparency during the inheritance process.
  • Discussing nonfinancial legacy items that are important for you to impart to your children. Consider stressing how you attempted to keep things fair and sincerely hope that the inheritance process helps pull the family together rather than tearing them apart.

This three-step process is designed to keep your children’s relationships intact even when you are no longer physically here. Hiring a competent attorney, creating a clear financial overview, and communicating what is important to you are key steps in helping to keep your tight-knit family close for generations to come.

Originally published in Forbes July 2, 2020.

Bernicke does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes, and all uses thereof should be guided accordingly. We are neither attorneys nor your accountants, and you should interpret no portion of this material as legal, accounting, or tax advice. We recommend that you seek the services of a qualified attorney or accountant.

Learn why you may be able to retire earlier than you think.

  • This field is for validation purposes and should be left unchanged.

Are We Right for You?

Schedule Your Complimentary Consultation Today!

About Us

Bernicke Wealth Management, Ltd. (Bernicke) is an independent, multi-disciplinary firm with 20 employees. Our financial advisers provide wealth management services for individual investors, businesses, foundations, and nonprofits, including investment planning, retirement planning, estate planning, and tax planning.

© 2021 Bernicke Wealth Management, Ltd. | Site Development: Midstream Marketing

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a registered investment advisor. Great Valley Advisor Group and Bernicke Wealth Management are separate entities from LPL Financial. The LPL Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.

Learn why you may be able to retire earlier than you think.

  • This field is for validation purposes and should be left unchanged.