DISADVANTAGES OF HAVING NO ESTATE PLAN
Estate planning is the one area of law in which clients proactively choose to search for an attorney. In every other area of law, clients are forced by circumstance to react by seeking legal counsel. Whether they are getting divorced, being sued or selling a business, it is life’s particular circumstances and the imperative of deadlines that drive them into the market for a good lawyer. By contrast, estate planning can be put off indefinitely, often with tragic consequences for those left behind.
If you have no estate plan, the State of California decides who will receive your assets on your death and who will look after your minor children. The Probate Code’s broad-brush approach may not fit with your individual circumstances.
If you have no estate plan, whoever ends up looking after your minor children will have to petition the court when money from your estate needs to be spent. This is an expensive and cumbersome way of living. Taking responsibility now enables your child’s guardian to focus his or her energies on caring for the child, rather than on unnecessary administrative burdens.
If your spouse may remarry after your death, your children will thank you for setting up an estate plan which protects their interests
If your child may divorce, his or her inheritance is far better protected from the estranged spouse’s claims of commingling if left in a trust than if your child received the assets outright because you did not create an estate plan.
There are many other reasons that family life continues more harmoniously with an estate plan in place – from reducing your tax burden to influencing your young people to stay in school. An estate plan can add greatly to your family harmony.
BUILDING A FOUNDATION FOR A HARMONIOUS FUTURE
Very often, being open about your estate plan is the best way to ensure that in the aftermath of your demise the family remains united. In the majority of cases, it is better to inform your family members what to expect. Particularly if your assets will not be equally shared between your children, it usually better to explain your decision now rather than leave people guessing.
How you leave your assets may be interpreted as a definitive statement about who you love the most, who you trust the most and who you most appreciate. Explaining your dispositive plans can make the difference in ensuring your death results in the family uniting to protect the best interests of every grieving relative.
It’s usually better to face one’s insecurities, take courage and try to get everyone on board with the best plan for your family.
HARMONY BETWEEN SPOUSES AND PARTNERS
Victorian melodramas are full of flowery descriptions about high romance, but when the young man approaches his beloved’s father for her hand in marriage, the conversation takes place behind closed doors. The author skirts over exactly what is being said. Yet this is the discussion we all need to have about money. The father is vetting the young man about not just his actual wealth or even his prospects, but about his attitude towards money. The father knows that if the young man’s attitudes mirror his own, the daughter will feel well-looked after. If the two young people come from families with similar beliefs about money, it’s less likely to be a source of conflict.
Nowadays men and women are expected to make their own arrangements about getting married. But instead of insisting on carrying out this conversation themselves, the need to spell out their exact expectations is often ignored until the stress caused becomes unbearable. It takes maturity from both parties to have this discussion, but if it is too much of a challenge, better to know now than after you are married.
HARMONY ACROSS GENERATIONS
Having a seat at the adult table requires us to face up to our financial reality and to find the right words to discuss it with others.
Whatever your financial situation, a stony silence within the family on the subject of money can only cause further disconnect. Family life is more harmonious when everyone is working towards common goals. Being allies on the same team makes everyone feel more loved, as well as actually making the goals more achievable. Positively influence your young people’s attitudes towards earning, saving, investment and spending by discussing financial realities.
If you are part of the “sandwich” generation (sandwiched between the sometimes disparate needs of seniors and offspring) then you know that intergenerational roles can be very tricky to get right. If you wish you had better communication with your parents regarding the family finances, use that lesson in developing a more open, fruitful discussion about money with your own children now.
Creating an estate plan is a good place to start the conversation. At the very least, you will make a tally of your financial assets, giving you a greater understanding of your successes to date and the challenges you face.
Choosing to have an appropriate family discussion about the situation can be very empowering. We may assume that children should not be needlessly burdened about the details of family finances, but in reality, they may be silently fretting as they see their adults laboring under difficult circumstances. Or they may have overheard us griping about the cost of living and not know whether to take those off-the-cuff remarks seriously. It is for us grown-ups to initiate the discussion and set the emotional tenor for dealing with money. Children can be very responsible about money, given the chance. In the absence of any such discussion, we miss the opportunity to pass on our ethics and our cultural beliefs about how to deal with finances. That’s a duty that must be fulfilled.