Family Dynamics of Disclosing Your Estate Plan
Posted by Robert Ingrasci on April 03, 2025
When considering estate planning, a common dilemma is whether to disclose the details to family members. The best approach varies based on individual goals and family dynamics. Thoughtful communication can significantly minimize confusion and conflict after your passing. Let's explore the advantages and disadvantages of sharing your estate planning decisions with your family.
Advantages
- Explaining Your Wishes
- Helps beneficiaries understand your decisions, especially when "fair" doesn't mean "equal."
- Example: Different treatment for adult children from a previous marriage vs. minor children from a second marriage.
- Obtaining Feedback
- Allows loved ones to ask questions and provide feedback.
- Opportunity to discuss alternatives that better meet their needs while satisfying your estate planning objectives.
- Streamlining Estate Administration
- Enables executors, trustees, and holders of powers of attorney to act quickly and efficiently.
- Important for those designated to make health care decisions or handle financial affairs if you become incapacitated.
Disadvantages
- Strained Relationships
- Some loved ones may be disappointed, leading to strained relationships.
- Keeping plans private avoids uncomfortable situations but deprives you of resolving conflicts during your lifetime.
- Encouragement of Irresponsible Behavior
- Promise of financial independence may discourage children from behaving responsibly.
- Better approach: Use your estate plan to encourage desirable behavior.
State Laws
- Varies by State
- Rules on trustee disclosure to beneficiaries differ.
- Some states allow "quiet trusts" or "silent trusts" to keep the trust secret.
- Other states require trustees to inform beneficiaries about the trust's existence and terms, often at a certain age.
Conclusion
- Thoughtful Communication
- Open communication can support your plan's success and give loved ones clarity and peace of mind.
- A well-crafted estate plan should speak for itself, but sharing details thoughtfully can be beneficial.
Reach out to a tax professional at Lumsden McCormick. We can offer guidance based on your current circumstances.
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Bob is an experienced tax professional who devotes his professional time to structuring tax strategies in the areas of compliance, consulting, and planning. Bob works closely with a broad range of high-net-worth individuals and multi-generational families, specializing in the areas of gift and estate planning, charitable gift planning, trust and estate administration, individual taxation, and wealth preservation. Bob serves as a practice leader in the Family Wealth and Estate Planning group. Bob joined Lumsden McCormick in 2008 and was named partner in 2022.