Sep 07

Estate Planning – It Doesn’t Have to be Stressful


Thanks to our guest blogger - Jo Stephens, MBC Wealth Director and Financial Adviser, for sharing her insight into estate planning with us below.

As a financial adviser, I have spent a lot of time with clients helping both protect and build their wealth. It occurred to me we rarely have conversations about what was to happen to the wealth when my clients had passed onto greener pastures.

I met with an Estate Planning expert and discussed my concerns that clients were potentially missing the chance to determine what should happen to their wealth once they were gone.

Why Avoid ‘The Talk’?

We all know that life is a terminal condition. Few of us feel comfortable discussing it and many feel uncomfortable talking about money. This creates a perfect storm of avoidance.

There are other reasons people don’t want to discuss inheritances. Parents may feel their children will be less productive and wait around to live off mum and dad’s hard work. Others are concerned that discussing it will cause family disputes or actually make it happen!

The cold hard truth is - if you don’t discuss it now, the chance of a family feud escalates along with the chance of feelings being hurt.

Add to the general confusion some bitterness between siblings or family members boiling up and step in the lawyers. This is the ‘worst case’ scenario - but why risk it?

Transparency is Key

Having a transparent talk with your family about who will inherit, what they will inherit and why they will inherit - will help everyone understand what you are trying to achieve.

It will also give them a voice about what their expectations are and how this can then be dealt with. Having the talk about death will also provide you with an opportunity to discuss what assets you have and where paperwork is held. Things such as social media accounts and funeral arrangements can also be discussed. It can be stressful, but like all things - if you have a plan it will be easier.

The Plan – Stepping Through the Estate Planning Maze

‘Money and Life Magazine’ has produced an excellent plan to use as a guide when thinking through the estate planning process. The plan provides a step-by-step guide.

Step 1 - Identify potential hotspots!

Think about what you are planning to do with your assets and why. Are there non-equal portions of the estate going to people who would assume equal share, why did you decide to do it the way you have? Is someone in your family vulnerable (e.g. a disability, an unstable marriage, are they a gambler, a drug addict or a spend thrift) - if so are you going to arrange for their money to be protected from others or themselves. Identify issues now and be real about it. Unfortunately, you do not get to come back to try again.

Step 2 - Have a game plan.

How do you plan on discussing this with your family? Are you going to have a family meeting or are you going to discuss it individually with each child or inheritor? If it’s a family meeting - will it be one meeting or a series of meetings. Who will be involved – identify the members who need to understand what is happening with the estate and why. Identify what it is you are trying to achieve and how you will go about it.

Create an agenda as that will give you a map to follow and ensure you do not miss anything you wish to discuss. Consider having your accountant, financial planner or a family friend present – someone who can step in and move things along if they get heated and get the discussion back on track.

Step 3. Communicate.

Carefully explain why you have set out your estate as you have. Simple explanations go a long way towards avoiding bad feelings.

Step 4. Keep the peace.

Keep calm! Speak in a calm tone. Don’t get upset and lash out if things are not going the way you want. Remember talking about your passing maybe emotional for your children so emotions may run high.

Stay focussed on the topic at hand and do not let other family issues get in the way. Remind everyone that relationships mean more than money and things.

Remember, no matter what is said you have the right to distribute your estate as you wish. If your family do not agree let them know they have been heard, but don’t feel pressured to change your plan.

Step 5. Follow up.

After the discussion, draft a simple summary of your estate plans and distribute it to your heirs for final input. This draft can also include information such as where your important documents are located and what you’d like for your funeral. It is important to ensure everyone has understood what was discussed and is on the same page.

And remember as my mentor in this field of advice told me…a Will is the last opportunity to talk to your family!

Give us a call for some professional estate planning advice tailored to your individual requirements on 02 6362 0988.