Many people avoid bringing up the subject of estate planning or even money with their children but significant wealth will be transferred to generation X in the coming years. It is anticipated that over $68 trillion will change hands within the next few decades.
Making sure that you have an estate and that you have discussed at least some of the basic aspects of it with your children could have a significant impact on your overall legacy as well as the total amount that is paid out in estate taxes. While it might generate some uncomfortable conversations, it’s good to be prepared for this.
First of all, you can transfer money and assets the way that you want when you have completed your estate planning documents and strategies and informed your loved ones about it.
A great starting place is to ask any children that you want to instill in these roles if they are comfortable serving as the trustee, power of attorney, or executor. You can explain what each of these roles involves and their responsibilities so that they are clear about having to step into this or have the opportunity to say it’s not a fit for them. The second reason to complete your estate plan and discuss it is to minimize unnecessary expenses and taxes.
Many adult children will not have experience handling the complex issues that wealthy retirees might be facing. The list of things that can be confusing for an adult child include individual retirement accounts, life insurance proceeds, non-qualified accounts, and step up in cost basis.
There are likely key reasons why you chose all of these different kinds of accounts, but you will need to explain this to your child. Finally, having this conversation with your loved ones ensures that they know you cared. It is a valuable opportunity to connect even after you have passed away. You can share with your children what your money means to you and why you are speaking about it. This helps to model positive behavior that can encourage them to complete their own estate plan too.
Talk to our Thumb of Michigan estate planning lawyers to get support.
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- Discuss Your Estate Plan with Your Generation X Beneficiaries - March 3, 2021