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Although it is tempting to add the Fourth of July, the best time of year for regular family discussion of estate planning is really the holiday season spanning from Thanksgiving through Christmas, of course including Hanukkah. The window may be expanded to New Year’s Day for secular families, for example those with traditions forged in Soviet hell, or even later into January in the case of Orthodox Christian families. (For a macabre alternative, some families may want to expand the window earlier to what is fast-becoming our most secularized holiday, Halloween.)

The point is, try to pick a special time of year when it is easier for the whole family to meet on a regular basis, and when the few not able to make it can at least “zoom” in occasionally. For best results, estate planning discussion should be a regular family tradition, not a one-off or irregular occurrence. A good estate plan, like a good business plan, changes over time to meet changing circumstances: changes in the law, changes in your property, changes in your family. A family that communicates planning well is more likely to succeed and avoid conflict.

The world quiets down and becomes more introspective, more family-focused, during the holiday season. The best single day is probably Thanksgiving Day as it is traditionally a day to thank God for His many blessings, some of which, in the absence of a decent estate plan, may be mixed blessings due to the evils of probate court (long delay, high cost, abuse due to the public record) or creditors or predators.

Not that you need to have the entire conversation during Thanksgiving dinner itself, or even all on that day. You have to play it by ear, and manage the important conversation to avoid conflict. You may want to break the ice and bring up the need for estate planning during dinner, maybe talk a little more over dessert, and then have a serious sit-down afterward while the tryptophan-infused family is more open to hypnotic suggestion.

This all works best if the patriarch and/or matriarch initiates the discussion of estate planning, perhaps simply mentioning that they are beginning the process and will be deciding soon who will steward the blessings and how blessings will be shared.

Sometimes the discussion must be initiated by younger generations because the grandparents (or maybe both parents and grandparents) drop the ball. Maybe they refuse to do estate planning, or refuse to update a badly outdated estate planning. (Most adults lack any estate plan; most estate plans that do exist are badly outdated and most people have no idea what’s in them.) This is an emergency, and a very tricky situation to navigate. You want to avoid coming across as greedy — that will only make things worse. But you must prod them to plan properly before they become incapacitated and not able to plan for themselves. And planning properly is key. There are many alternatives for low-cost and even free “planning” but you may want to financially assist your parents (or grandparents) to engage in a higher level of planning that actually protects the family. You may even want to mention that you are now working on your own estate plan, and that process has made you understand better the need for such planning by your parents or grandparents.

Once the patriarch and/or matriarch are onboard with high-tier planning for family protection, for success of the plan and to minimize conflict they should communicate with family members, on at least an annual basis, regarding the following issues:

  • what is the family mission? what values are important to the family?
  • California estate planning almost always involves a revocable trust to avoid the nightmare of death probate and living probate (conservatorship) — who will maintain the estate plan with updates and proper funding?
  • who will determine incapacity?
  • how will financial decisions be made during incapacity? health care decisions?
  • how will any long-term care be financed?
  • what happens when the first spouse dies? will there be simply a revocable trust for survivor, or will irrevocable trust(s) be set up for the remainder of the survivor’s life? any blended family planning? any remarriage planning? any asset protection planning? any planning to avoid estate tax? any planning to avoid capital gains tax?
  • any planning to avoid property tax (reassessment under Prop 19)?
  • any tangible items of extreme sentimental value?
  • any special assets requiring special planning (e.g., guns, planes, horses, vacation homes)?
  • any kids with special needs?
  • will the kids benefit equally? if not, why not? might incentive trusts be used in lieu of disinheritance?
  • will a common trust help kids through college? for how long?
  • will continuing trusts protect your kids’ inheritances from creditors and predators? do your kids want this protection? it’s your money, so do you really care whether or not your kids want this protection?
  • will continuing trusts protect your kids’ inheritances from your kids?
  • how will inherited IRA’s be handled to maintain protection and avoid a tax disaster?
  • will inherited funds be used to incentivize values important to the family ? will a dynastic trust be set up during life for this purpose? [Examples: financial mentorship; career planning; career maintenance; family maintenance; estate planning itself; religion; charity; firearm training with specific, objective, and immutable performance standards]
  • how do we plan to increase wealth over the generations? will generation-skipping transfer tax planning be necessary?
  • is business succession planning important to the family?
  • is tax-leveraged charitable planning important to the family?
  • can any of these goals be furthered with life insurance planning?
  • conduct a Family Fire Drill: pretend that a family member dies or is suddenly incapacitated — what happens? discuss

This, of course, is not an exhaustive list of all estate planning issues to be addressed, but regular family discussion of these points will go a long way toward keeping the family on mission, without conflict.

Politically astute families talk about politics. Religious families talk about religion. Rich families talk about money. Why not talk about all three? If contention results, you can always fall back to discussing estate planning in a way that benefits the entire family.

Start your plan today. (Free to start.)

And be sure to forward this post to every member of your family.

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