You know what assets you want to leave to your children, but should you tell them exactly what they’re going to get when you make your estate plan? Or is that something you should leave for them to find out after you pass away?
Generally speaking, it is always best to tell the kids as far in advance as you can. There are a few positive benefits to doing this, such as:
- They will not assume anything. Expectations can be a problem when they are not fulfilled. If your children assume you have $2 million and you really only have $200,000, you want to temper those expectations in advance.
- You can stop them from disputing the will or fighting over the assets. For instance, maybe you have two children and just one home. You want the house to stay in the family, as it has for generations, but you plan to leave it to just one child. The other may feel shocked to find out about this, but it is better for that shock to come while you are still around. This can stop a dispute later because your heirs know it is what you really wanted.
- You can explain your decisions. This may be necessary with unequal inheritances, for example. Your reasoning for leaving more to your son than your daughter could be that she is financially successful on her own, while your son is not. You’re just trying to help the child who needs it. Explaining this helps your daughter because she does not feel like you unfairly favored your son.
These are just three examples, but they show why estate planning conversations are so important. Make sure you know all of the legal steps to take as you get this process started.