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Communication, education key in family wealth-related decisions


When distilled to its very essence, that seems to be the bottom-line message when it comes to family members all being on the same page in the realm of estate planning. Candid, early and consistent communication between parents and their kids regarding family assets, expectations and the future is critical in paving a smooth road in upcoming years, after an estate plan has been fully revealed and is implemented.

Consider why that is true, and why a timely meeting with an experienced estate planning attorney to forthrightly discuss wealth-related matters and future expectations concerning things like inheritances, charitable giving and other financial considerations can be of utmost importance to a family.

The reason, as amply revealed by a clear dichotomy that emerges from scrutiny of two surveys: Parents and kids tend to have very different ideas on inheritances, and a serious disconnect looms on the horizon for many families that do not clearly communicate those ideas and reach a financial understanding as early as possible.

One survey notes that about 25 percent of children polled expect to receive an inheritance, typically a median figure between $50,000 and $100,000. Another survey finding reveals that more than 30 percent of wealthy parents do not intend to provide any such inheritance, preferring to leave their money to charity.

That parental thinking owes to several causes, including a desire that the children successfully make their own way in life and a concern that longer life expectancies might eat up a good portion of assets on long-term care planning.

The point that financial experts and estate planning commentators centrally seek to make concerning the potential problems that can arise down the road from those two differentiated perspectives is this: Future questions and arguments can be materially dampened through timely inheritance discussions.

“Educate and communicate,” says one financial planner.

Source: Chicago Tribune, "If you plan to leave an inheritance, manage expectations," Steve Rosen, Oct. 14, 2013

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