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Estate Planning: Talking About the Inheritance

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Many parents find talking about money with their children as difficult as talking about sex.It may be awkward, but talking to your children about their inheritance benefits everyone.

If kept in the dark, children may think their parents are “loaded” and expect a significant windfall upon their passing.  They may worry about the cost of nursing home care and wonder if there are enough funds to cover this expense.
When talking about inheritance, parents can explain their success in accumulating assets, be that many or a few.  Children can learn first hand financial lessons from their parent’s experience.

In addition to discussing amounts, it’s also important to talk about how the inheritance will be distributed. In many estate plans, distribution is delayed or paid out over time even when adult children are involved. When parents can explain their thought process, hurt feelings and family discord can be avoided ahead of time.

Finally, it’s important to remind children not to count on the money. Investments can rise and fall, unexpected health issues or family emergencies may dramatically affect a parent’s net worth. An important part of the estate planning process is to have a candid family discussion about money and inheritance. This helps everyone prepare for the future.

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