Good Estate Planning Involves Communication with Family Members

When getting their “financial house in order” through setting up an estate plan, is high on a person’s list of New Year’s resolutions, he or she should remember that communicating the details of the estate plan to family members is an important part of the process, according to research by The Hartford Financial Group. Maureen Mohyde, director of the Hartford’s corporate gerontology group, said that their conversations with older adults revealed that estate planning was “not about money, it’s about creating lasting bonds within families.”

The first person to involve in estate planning, and the execution of a plan, is your spouse, says Alan Howard, writing for Scripps Howard News Service. “The basic family asset inventory and income projections should be familiar to husband and wife.” Whether the estate plan is a simple “all to my wife” will, or a more complex plan involving bequests, trusts and health care related documents, such as livings wills, both spouses should actively participate in the planning process, “not just the signing process.”

The Hartford research, part of the “Family Conversations” series sponsored by the company, surveyed older parents between the ages of 70-79, and adult children between the ages of 45-65, primarily Boomers. The study found that older parents were more comfortable discussing the sensitive issue of estate planning than their Baby Boomer children. More older parents reported having estate planning documents, such as living wills and durable power of attorney, than their children knew. Almost all older parents said they had discussed their estate plans with their children, but fewer children remembered having the conversation.

Maureen Mohyde recommends that families focus on what they agree on. Parents should reach out first, and children should remember that their parents are comfortable talking about estate planning. Children should also ask how they can help their parents maintain their independence, she said.

When people give in to procrastination, and there is no plan in place to prepare for estate taxes, a “qualified disclaimer” is a good option, bizwomen.com says. The disclaimer is made when an individual who inherits a particular sum of money from a parent refuses to accept the money. Under the terms of the parent’s will, the money then goes to a grandchild, which allows a transfer of money from parent to child that the IRS does not consider a gift. The disclaimer option must meet four requirements, according to bizwomen.com:

  • A qualified disclaimer must be made within 9 months of the initial transfer
  • The disclaimer must be made in writing, with notification to all interested parties
  • The initial recipient of the interest must not use any of it
  • The person disclaiming the interest does not name the person who will next receive it.

You may like these other stories...

A review of Financial Accounting Standards Board (FASB) guidance on share-based payment transactions found that the 2004 standard achieves its purpose and provides useful information to investors and other users of financial...
An examination initiative launched by the US Securities and Exchange Commission (SEC) earlier this week will enable the agency to evaluate whether municipal advisors are complying with new SEC rules that went into effect...
Continuing its efforts to simplify accounting procedures, the FASB has issued a proposed Accounting Standards Update on customer fees paid in a cloud computing arrangement. The newly-proposed update (Intangibles—...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.