“Inheritance is the natural process. But, legacy is a choice.” – Farshad Asl
Creating a family legacy through estate planning and financial conversations is not just about distributing assets – it’s a holistic approach that combines financial security, personal values, and the well-being of your loved ones. By proactively addressing these aspects, you can leave a lasting legacy that reflects your values and benefits future generations.
We’ve previously covered estate planning at length, so this blog won’t necessarily focus on the estate planning process. In addition, we’ve also covered how to go about creating your legacy.
This blog will focus on the idea and process of involving your family in estate planning conversations and how it can benefit the meaning and execution of your family legacy.
The Necessary Discussions
Discussing estate and legacy planning with your family is a critical process that should be handled with care, openness, and transparency. These conversations are essential to ensure that everyone understands the estate plan, their roles and responsibilities, and the distribution of assets.
These discussions can be emotionally charged, but they are necessary to preserve familial relationships and the efficient administration of your estate. Let’s walk through a few of the things that you should include in your discussion:
- Transparency and open communication: Encourage open and honest communication among family members. This is essential to avoid misunderstandings, disputes, and potential conflicts in the future.
- Clarify your objectives: Clearly articulate your objectives and priorities regarding your estate. For example, do you want to minimize taxes? Support charitable causes? Or transition your business?
- Educate your family: It’s also important to acknowledge that the estate planning process is likely foreign to most family members. Consider educating them about the process so they better understand your process and their roles in it. This can help reduce confusion and anxiety when the time comes to implement the plan.
- Identify roles and responsibilities: Discuss who will play critical roles like the executor, trustee, guardian for minor children, power of attorney, etc. Ensure that the people you choose for these roles are willing and able to fulfill their responsibilities.
- Proactively address potential conflicts: Acknowledge any potential sources of conflict within your family. For example, if you have children with different financial needs, consider how to address the disparities. In addition, discuss how you will handle potential disagreements or disputes and, if necessary, set up mechanisms for dispute resolution.
Estate planning can bring up various emotions, memories, concerns, etc. for family members. When there are complex family dynamics, deep-rooted conflicts, or concerns about transparency and fairness, consider involving a third-party mitigator. This neutral party can facilitate discussions, provide guidance, and work toward consensus. A mediator can also help family members express their concerns and guide you toward compromises that can lead to an equitable and acceptable estate plan.
The importance of having these discussions and fostering transparency cannot be overstated.
A Legacy Beyond Money
“The greatest inheritance you can give your children is not money or possessions, but a good name and a life well-lived.” – Unknown
At TFS, we are passionate about tailoring your financial life to your personal values. The same goes for your estate plan and your legacy.
So much of our life is tied to our family, experiences, and “things” like family traditions, recipes, and memories that are worth much more than money.
When discussing your legacy with family, be nostalgic and remember what’s important. It can be easy for people to get emotional about money when they don’t understand the “why” behind it, so take the time to unpack the “why.”
For example, if charitable giving is essential to your legacy and estate plan, reflect with your family on why charitable giving is meaningful to you. Things like:
- Did you spend every Thanksgiving morning serving meals at your community center? What types of things did you see/experience?
- Did you spend time picking out Christmas presents for children at your church? What did that teach you?
- Do you all have a passion for literacy? How can you continue that when you’re gone?
There are many ways to include charitable giving within your estate/legacy plan, but identifying, aligning, and reflecting on your “why” can lead to a robust and united family unit even after you’re gone.
TFS Client Case Study
We’ve unfortunately worked with families who haven’t used this process, and that led to bitter feelings, confusion, and even legal action within families. It’s not something we like to see, so we’re passionate about educating our clients about this process.
One of our clients has been a great example of utilizing this process effectively. Let’s look at their scenario and how they handled it as a family.
Here are a few highlights to know about this family:
- They were charitably minded and gave to charity continuously throughout their lives
- They had a large sum of money they wanted to dedicate to giving to charity
- They also wanted to leave some funds for their children
The children in this family knew about their parent’s charitable mindset, so it was no surprise when they learned of their want to leave some of their estate assets to charity. But, when the family sat down together and reviewed the physical estate planning documents, they didn’t reflect the parent’s wishes.
Usually, this could lead to confusion over the parent’s wishes, how to utilize the funds best, etc. But, since this family had previously had a conversation about their family legacy, they were able to come to a conclusion they could all be happy with.
They decided to essentially “disinherit” themselves from their parent’s will, freeing up funds for charitable giving. They did this because they knew it was what their parents wanted.
It was terrific for us to see the children being so open to their parent’s wishes. It’s a testament to the parents’ decision to involve their children in charitable giving and estate planning. Because everyone knew their values and wishes, fighting over funds went out the window, and they were able to come to a decision that they and their parents could be proud of.
In addition, this means that the charitable mindset didn’t stop with the parents. Involving their children in the charitable giving process and integrating it into their family values and legacy allows them to continue to give together long after they’re gone.
In conclusion, creating a family legacy through meaningful conversations and estate planning is not merely about distributing assets – it’s about passing down your values, wisdom, and the essence of what your family stands for. These discussions, steeped in transparency and trust, lay the foundation for a harmonious, empowered family that can navigate life’s challenges with unity and grace.
By taking this proactive approach to estate planning, you can leave a lasting legacy far beyond wealth and leave your loved ones with the precious gift of a solid and enduring family legacy.
Please reach out to us to get started or review your legacy plan today. We look forward to the opportunity to help you leave a family legacy.
