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The state of your estate: Transparency rules

Do you know which two topics Americans find hardest to talk about? It’s money and death. A recent survey from Wells Fargo revealed that 44 percent of sampled adults ranked personal finances as the most difficult topic to discuss with others. Almost as many, 38 percent, named death first. Discussions around politics, religion, taxes and personal health all ranked as easier.

In estate planning, our reluctance to talk about money and death often leads to uncertainty, confusion and resentment on the part of the next generation. As a consequence, families may fall apart and wealth may crumble. Transparency, on the other hand, ensures that your survivors understand your wishes and know which responsibilities await them after your death.

The points you should keep your heirs posted on include the identities of the successor trustees of your living trust, the name of the guardian for your children if they are still minors, of the person who holds power of attorney for healthcare for you, and of your financial advisor. Other information you should share relates to the location of pertinent documents and lists: Where do you safeguard your will, your birth and marriage/divorce certificates, your social security card? Where do you keep lists of accounts, of real and personal property as well as insurance policies that you own?

As an attorney, I advise you to discuss your estate plan with your family sooner rather than later. You should initiate the conversation while you are of sound mind and before a crisis turns life upside down, rendering your family emotional or unwilling to have a straight talk. I also suggest that you take the occasional opportunity to share stories of how you succeeded or failed and of what you learned along the way. Your inheritors will see your legacy in a different light.

Is there a downside to engaging in candid conversations about the state of your estate? Maybe. Some people will argue that designated heirs could lose their motivation to work hard if they knew that they will inherit in a substantial way. But in my experience open communication strengthens family bonds and leaves everyone involved feeling empowered. In estate planning, transparency around death and money can make the difference between a failed and a successful transition of assets.

By Kevin J. Moore