A recent report from BMO Wealth Management says that the failure to prepare families for the financial transition that accompanies parents’ final transition can lead to family discord. The report, “Estate Planning For Complex Family Dynamics,” addresses difficult estate issues that many families face because of divorces and remarriages, or from couples being unmarried but living together. These less traditional relationships introduce multiple constituencies into the family mix, which can make asset distribution upon a parent’s death a contentious matter. Of course, it’s not always a smooth process for traditional nuclear families, either.
Among the report’s findings:
• 40% thought the distribution of their parents’ estates was unfair, with unmarried adults most likely to feel aggrieved.
• Only 28% of all adults said they knew details of their parents’ wills or estate distribution plans.
• 40% of parents surveyed have never discussed their estate intentions with their children.
• 25% of married adults said only their spouse knows the location of their wills/powers of attorney.
• 52% of all adults surveyed don’t yet have a will, a figure that rose to 56% among adults ages 35-54.
Family feuds can ensue when members feel they don’t get their fair share. It doesn’t have to come to that. Open communication between parents and beneficiaries can set expectations and defray potential conflict down the road regarding money and how sentimental assets will be distributed.
Whichever method you use, make sure you document it, and that a copy is with your will and everyone involved.
And for folks with complex finances, hiring an estate planner would be a good idea, too.