What’s your favorite Reading of the Will Scene? “Gran Torino”? “Trading Places”? Whatever the movie, the script is always the same: the old man’s survivors, still in their funeral duds, sweat it out while the family retainer dispassionately sows the seed for domestic disappointment, mayhem, even murder.
Hollywood’s version of estate planning is a power play from beyond the grave — the dearly departed’s chance to get even, or finally tell the relatives exactly what he thought of them.
But here’s another possibility: Maybe the old geezer was scared to talk directly to his loved ones about his estate.
“It’s hard enough to get people to talk to me about their estate planning,” says Victoria Z. Sulerzyski, an estate planning attorney at Ober, Kaler, Grimes and Shriver in Baltimore, Md. “Most people don’t want to discuss it.”
“It reminds you of your own mortality,” says Steve Harnet, associate director of education for the American Association of Estate Planning Attorneys, and a certified specialist in estate planning in San Diego. “They know it’s going to be an emotionally charged conversation. Their kids may resent what they have to say, or maybe not. But there is always anxiety.”
Yet talking to your beneficiaries may be one of the most important parts of managing your estate before you die, experts say. Your careful planning may come to naught if your survivors are uncertain about whom to contact when you go, or how to pay for basic expenses like funeral costs and taxes. They may be unprepared to deal with the not-insignificant paperwork that your estate plan may entail. (More:What You Should Know About Your Spouse's Money)
Your beneficiaries could also be unsettled by a sudden, unexpected influx of cash. “Even a good surprise can throw them off kilter if they are grieving,” says Hartnet.
“I’ve seen many situations where parents die and the adult children don’t have a clue,” says Clark McCleary, president of the National Association of Estate Planners & Councils. “They are dealing with the emotional issue of losing their parents, and meanwhile they are searching through bottom desk drawers of desks and looking through checkbooks.”
The one-stop shop of estate planning discussions is the executor — the person responsible for carrying out the provisions of the will. “Once will and trust instruments are put together, sit down with the executor and walk them through it,” advises McCleary.
This person is often a family member, and a beneficiary — McCleary picked his son, an attorney, as his executor — but doesn’t have to be either. A trust office for a bank, an attorney, or even a friend can fill the role, and can be a neutral representative of your intentions.
Whoever you choose, it’s incumbent on you to get the executor on board. Given the burden of paperwork and the delicacy of explaining the contents of the will, says McCleary, “it would be criminal not to ask his or her permission.” The same goes for anyone who stands to inherit a business they’ll be expected to run, or sell.
Worth a lot? Discuss with your family
Beyond these individuals, no one necessarily need to know what’s in your will, and many people feel a sense of privacy about their decisions. “It’s case by case whether to push harder or not get into it,” says Sulerzyski.
Ask estate planners what they think, however, and they’ll likely say it's best to air your plans with your children and other inheritors. “They don’t need to know the extent of the estate,” says Hartnet. “It can be as simple as saying, ‘Your mom and I wanted you to know that we took the steps to plan what will be a long way down the road,’ and letting them know, say, that you’ve left everything to them equally.”
Other couples believe in full disclosure, letting their kids read their will or handing out copies for them to keep. A family that McCleary knows makes estate planning part of annual meetings involving three generations. “There’s no bad way to do it,” says Hartnet. “The important thing is to communicate.”
The more you are worth, the more you might want to say. The greatest concern of many wealthy families is that their children or grandchildren will simply coast if they know what riches lie in store. Speaking up while you still can allows you to set expectations. “A patriarch and matriarch will often say, ‘Obviously you understand you’ll get a fair sum of money,’” McCleary says. “But they will tell them, ‘Don’t build your life around it.’”
There are some situations which estate planners agree aren’t helped by transparency. Children who have already strayed into drugs (helped by an excess of funds or not) or who are in a rocky marriage are often a couple’s biggest planning headache. When a trust has been set up in hopes of preserving these kids’ pieces of the pie while they sort out their lives, there’s wisdom in saying less. (More:Your Bank Accounts: Are They Really Insured?)
Or at least hold back until you are gone. Some wills are accompanied by a videotaped or written explanation of their contents, says Victoria Sulerzyski. Such reflections are better placed in a separate instrument, she points out, since wills, once they are probated, become public documents.
But don’t dodge a face-to-face discussion because of family politics. When there is an “unequalization” in the will, talking through your rationale only becomes more urgent. Hartnet gives the example of a couple with two children, a son who is a successful physician or stockbroker and a daughter who is a teacher. “If they want to leave a third to Johnny and two-thirds to Sally, they need to explain it to both of them.”
The kids may surprise you with their own good ideas about how to sharing your estate. In Hartnet’s example, Johnny may volunteer that he doesn’t need the money as much as his school teacher sister and suggest that the will favor her. “If Bill Gates had a sister, he’d probably tell his parents he doesn’t really need the money,” says Hartnet.
Though your will may represent your mortality to you, in other words, planning your estate actually represents something more enduring, according to Hartnet. “Estate planning is a manifestation of your love,” he says. How you deal with your benefactors should reflect how you feel about them. “People who care what happens to their children make sure it happens in an orderly way.”