I just read a new report from Fidelity Investments. Fidelity did a new study and part of the study dealt with the issue of parents discussing their estate plans with their adult children. Unfortunately, I was not surprised by the results. According to the study, 70% of couples surveyed believed they have had detailed conversations about their estate plans with their adult children. When the adult children were surveyed, more than half said that they have not had this conversation with their parents. In addition, according to the study, 80% of parents believe that their adult children know where the parents keep their important documents such as their wills and trusts, medical and durable power of attorneys along with passwords. Unfortunately, only about two-thirds of adult children think they know where these items are kept. Obviously, the study reaffirms my belief that there is a disconnect between parents and adult children.
There is no doubt that when parents talk to their adult children about estate planning it is a very difficult conversation. I know personally how difficult and emotional it was when I had to have this conversation with my parents. That being said, the reality of the situation is that there is no alternative. I think it is always important to remember why we do estate planning. Many people believe that the reason we do estate planning is because we want to save on taxes and avoid probate.
Although those are noble goals, it is not the main reason why people do estate planning. The majority of people do estate planning simply because they love their families and they want to do whatever is necessary to make life as easy as possible for their loved ones when either they pass away or when there is some sort of family emergency. We all know that eventually we all are going to pass. There is nothing that we can do to prevent that. Your loved ones knowing what is in your estate plan and where valuable information is located can make life easier for them during a very difficult time. That is why it is important to have that difficult conversation with your loved ones.
The question is when to talk to your adult children about these issues. Of course, every family dynamic is different, but I encourage you to talk to them sooner rather than later. It is a very easy conversation to postpone; however, we all know how uncertain life is and we never know when a family emergency will occur.
Last year about this time I lost my father. The fact that I had this conversation with my dad made things immeasurably easier in handling his affairs. I know that if I didn’t have this conversation with him, it would have made things much more difficult on me and the rest of the family. One of the greatest gifts you can give to your family is that you made their lives easier upon your death.
As adults, we all have to do things we are not comfortable with. Sometimes in life we have to swallow hard and do what we know needs to be done. Therefore, I encourage you to have those conversations no matter how difficult and never forget that you’re doing it not because it’s for your benefit but rather, you’re doing what’s right for your family.