Many folks are uncomfortable discussing their finances. Still, you should seriously consider talking to your children and other affected family members about your financial situation and especially your estate plan.
Why? For starters, it’ll give your family an idea of what they can expect to inherit, and they can then factor that into their own financial decisions. It can also give you a chance to explain your bequests, especially if you plan to give more to some family members than others.
In addition, you can talk about end-of-life medical decisions, what sort of funeral you want and where key papers are located. You might even discuss what you would like your children to do with their inheritance. Perhaps you are anxious for them to buy their own home or for your grandchildren to go to good colleges.
There could also be other nitty-gritty financial details you want to tackle. For instance, you might explain the benefits of doing the stretch IRA, especially with a Roth. Alternatively, perhaps you plan to bequeath appreciated stock, but you want to emphasize that this is simply to get the step-up in cost basis, and your children should sell the shares immediately and buy a more diversified portfolio.
Our Humble Opinion: Most of us won’t leave millions of dollars to our heirs. But we can all make sure that our affairs are well organized, that there’s a detailed letter of last instruction, and that our families know our wishes regarding life-prolonging medical procedures. These steps—and more—can save our families from extra anguish during an already difficult time.
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