If you’re a senior, chances are you’ve worked hard for decades and built significant wealth. A comprehensive and well-thought-out estate plan can help you preserve your legacy, give you peace of mind, and prevent family members from fighting over your assets. But starting this conversation can be tough for two reasons:
- You have to bring up the unpleasant thought of your eventual passing
- You may want to make sure none of your loved ones feel left out of your estate
To help out, this article will dive into five tips seniors can use when preparing to talk to their loved ones about estate planning.
1. Have the discussion sooner rather than later
The discussion can be difficult, but it’s helpful to have it as soon as possible because estate planning can take time. If you don’t give yourself and your loved ones enough time to work things out, you risk passing away without completing the plan. This could lead to confusion and extra court proceedings.
Having the conversation sooner gives you the most time to get everything in order. You can always update your estate plan later if needed.
2. Be direct and honest
Being direct and honest is the simplest way to broach the topic of your estate planning and get it out into the open. It can help ease tensions around estate planning matters because your loved ones will see that you don’t have reservations or nerves about discussing them. At the same time, approach the conversation with empathy. You want to make sure all your loved ones feel heard in the conversation.
3. Explain what the estate plan will include
Estate plans have numerous documents for specific purposes, and it’s easy to get them confused. So, during the estate planning conversation, explain to your loved ones briefly what your plan will contain and what each document does.
Here are some documents found in many estate plans:
- Will: This explains how you want your assets to be distributed.
- Durable power of attorney: This names a trusted individual to handle financial decisions on your behalf if you become incapacitated. For example, the person you name could pay your bills with your assets and access your bank or investment accounts.
- Medical power of attorney: This names someone to make medical decisions on your behalf if you become incapacitated.
- Advanced health care directives: These explain your wishes for end-of-life medical decisions. They are also called living wills.
- Life insurance: A life insurance policy pays out a substantial death benefit to your beneficiaries if you pass away. The death benefit is tax-free, allowing your beneficiaries to receive more of your wealth.
You will also want to make notes about retrieving your will, accessing assets, and other topics if they fall outside the above documents. For example, if you have valuables in a combination safe, you will want to provide the combination for accessing them.
4. Prepare for input from loved ones
Your loved ones will most likely have questions, comments, and concerns. Preparing for this input helps you keep the conversation level and smooth and make all family members feel included, minimizing potential emotions around the topic.
For example, if you’re discussing your life insurance policy, a loved one might ask how life insurance works or wonder if they’re among your beneficiaries. In this case, you should explain how your death benefit payout works and who it will go to. For instance, if you have final expense insurance, loved ones can receive a small death benefit upon your passing that they can use to cover end-of-life expenses, such as funeral costs and medical bills.
5. Bring up the topic during any significant change
Many life changes — in your life or a loved one’s life — can impact estate plans. For example, you may move into a new home or start a business in retirement. Or perhaps one of your children gets married and has a child.
In either case, it’s important to update your estate plan to match your new situation. You may also have to bring up the estate planning discussion again in light of these new changes.
Start the estate planning conversation
Few find it easy to talk with their loved ones about estate planning. But you can bring up the subject more comfortably by following a few best practices.
Open the discussion as soon as you can comfortably do so, and be direct and honest. Explain everything in the estate plan and how it works, then prepare for input from your loved ones. Finally, bring up the discussion whenever a substantial change occurs in your life or that of one of your loved ones. Following these steps will make the conversation go as smoothly as possible and ensure your estate plan aligns your wishes with your loved ones’ input.
