Having THAT Conversation: Estate Planning Essentials

Many families struggle to organize their financial matters. Even more fail to effectively prepare their estate, and more importantly, their loved ones, for the unexpected. In this Viewpoint, Courtney Weber and Tom Bentley discuss strategies for getting organized and effectively communicating estate plans.

Simple mention of the words “estate planning” can conjure a variety of uneasy emotions: uncertainty, fear and sadness, to name a few. It’s these emotions combined with the ever-increasing demands on our time that make estate planning an easy topic to defer. We tell ourselves we can get organized later, when things finally calm down.

For some families, however, this will be too late. A major illness or death may occur before plans are in order, leaving loved ones to make sense of incomplete information and financial unknowns during a very stressful time. Most people believe they will live a long and healthy life, but one never knows when a family member may need to take over management of his or her finances, bills or the implementation of estate documents.

Through years of helping our clients and their families through these transitions, the Truepoint team has identified several best practices for being prepared:

Getting Organized

Proactively organizing your financial and estate information is essential to ensuring your long-term objectives are documented for the future. In 2014, Truepoint introduced the “Go Book” to help clients document the location and details of personal, financial and estate information. The Go Book is just one way a client can begin to organize personal information such as:

• Professional and family contacts
• Location of estate documents
• Disability and life insurance
• Home and auto insurance
• List of financial institutions, accounts and account numbers
• Credit cards
• Beneficiaries of retirement accounts
• User names and passwords (including those to social media websites or online photo storage)

Communication is Key

Too often, loved ones are left feeling overwhelmed and confused because an individual did not discuss his or her estate or financial information prior to a life-changing event. Searching for assets and missing information can be exhausting, and hiring a professional to do so can prove costly. Effective family communication can help prevent this from happening.

Any time estate documents are updated, it is critical that families discuss the plans and highlight changes. When you name an individual, friend or family member to any role in your estate documents, they should be notified right away. Confirm that they are willing to take on the responsibilities of the roles assigned to them, and explain the big picture of your intentions.

Discussing these matters with family members and children can be sensitive. However, there are things you can do to help ensure conversations are age-appropriate and helpful:

• For children in high school and college, it is important to let them know that you have plans in place in the event of death. In these cases, let them know who you have named to important roles (grandparents, aunts and uncles) and why you named them.
• As children become adults, you may choose to name them to primary roles in your documents. Let them know if you plan to do so, and show openness to engaging them in this discussion in the years to come.
• Finally, as children reach middle age and parents reach their later years, it is important to have conversations where children gain full knowledge of their parents’ financial situation and estate plan. Children can then fully help their parents navigate the challenges that come with aging, together making the best decisions with all information available.

Taking Action

Proactive planning requires careful consideration of possible future scenarios and a good understanding of oneself and one’s family. It also involves having clear conversations with those close to you about your financial and estate information. While your advisors can encourage these conversations, ultimately you must take action and communicate your wishes to those affected.

It can be difficult to find time in our busy lives, and discussing death and finances often falls to the back burner. Because one never knows what the future will hold, it is best to be prepared. Organizing and communicating your financial and estate plans to family members is important to ensuring your wishes are known, and is a wonderful way to alleviate their burden of stress when the unexpected occurs.