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Have you been putting off “the talk” about your estate?

Money and death are two of the things parents never want to talk about with their children. It makes sense: money can be a sticky subject and death is just morbid. Even so, such conversations happen every day among families, and typically when problems arise, it’s because the topic was addressed at the wrong time.

That’s why being proactive and planning a sit down conversation with your family, sooner rather than later, is so important. It’s probably a good time to discuss your retirement and beyond with your beneficiaries, so you can begin to pass along your financial wishes and wisdom.

Regardless of any bumps you may have encountered along the road, you’ve come a long way and learned to be smart with your money. Talking to your children now, planning ahead, and sharing that knowledge can help your loved ones avoid obstacles in the future.

Think about it this way, even if your family used to find it inappropriate for children to know the annual household income, times have changed and your family has grown. Now is the time to break those barriers and help prepare your loved ones for the future.

As you enjoy retirement and your estate continues to grow, the last thing you should do is wait for an extreme emergency before talking through the key details of your estate. Waiting only encourages rushed, and even rash decisions. Explaining your wishes to your family opens a vital conversation and helps prevent regret or apprehension when the time comes.

Here are the top reasons you should have a heart-to-heart conversation about your inheritance now:

1. Avoid Rushed Decisions

In case of an emergency, it is your responsibility to make sure your will and wishes are executed correctly. How should your life insurance be spent? How should the house be split? These are questions best answered before anything tragic occurs.

2. Make Changes

Your children might have had their own discussions or ideas on the estate and inheritance. Initiating a conversation helps you uncover their views, what they think is fair, and where they think certain assets should go. This will allow you to consider their wishes and adjust your plan if needed. Once you pass, the estate is legally required to be executed per your instructions, so getting enough of a head start on the topic to make changes where needed is important.

3. Save on Taxes

You are allowed to set up a plan that gives up to a certain amount per person (this amount changes regularly) each year without anyone paying taxes on the gifted funds. If you don’t plan carefully before you pass and your assets are given in a lump amount, the government will heavily tax your beneficiaries, leaving them with less. It is best for you and your children to sit down now to figure out how you can make “Lifetime” gifts to avoid tax issues (I would be happy to sit in and help).

4. Reduce Conflict

You’ve seen it in the movies: a family member dies and at least one relative is already counting their chickens, thinking a windfall of cash and assets is coming their way. Then, they are shocked to discover everything was left to someone else. While the example is a bit dramatic, it really would be a shame for any of your loved ones to be shocked or disappointed by your estate. By discussing things now, you can do your best to make sure everyone is as content and prepared as possible when the time comes.

5. Seize the Opportunity to Teach  

Sitting down with your children provides you with a valuable opportunity to pass on your wisdom. After you’ve spent years accumulating wealth, it is at least worth a formal conversation to reinforce the importance of being fiscally responsible and smart with the inheritance. Hopefully, this experience will even serve as an example to your loved ones for how they wish to handle their own estate someday.

After all:

After a lifetime of work building a solid estate for your next generation, you and your children may want to consider sitting down with me to discuss the logistics and plan for your estate. Your wealth can continue growing for years to come, and I would love to help your children succeed financially. It can all start today by planning “the talk” with your family.