Recently, we presented to a group of clients our new template for crafting letters of instruction to their heirs. We are gratified by the kind and positive feedback from everybody who attended. While still a work in progress, already we have helped clients find flaws in their plans. What has been brought to our attention though, is the fear many of our clients have about fulfilling their duties to their parents should a crisis-event happen. This can be an accident, disability, cognitive decline, stroke, or death, just to name a few possibilities. We addressed last month the problem of what we call the “battlefield promotion” in generational transfers from the standpoint of the older generation. This month we address the problem from the standpoint of heirs.
Most of our clients are leaving behind them assets far in excess of what they themselves inherited. The duties that their heirs will be forced to confront are equally greater. This can be the surviving spouse, children, nieces and nephews, or a multitude of other possibilities. Ask yourselves these questions. Are we designing our affairs for ourselves only, or also for those we love? Does our spouse have the desire or ability to deal with complex affairs? Does he or she like preparing taxes? Do our loved ones know their duties and responsibilities? Do they like and trust the people you do business with?
The problem for the next generation requires greater finesse. Clients tell us often that their parents hint to them that they have assets and estate documents, but that they have been kept a secret. Children do not want to appear as if they are anticipating a windfall at the expense of their parents. In our experience, the more children love their parents (or aunts and uncles, etc.), the more they are unlikely to broach the subject and the more inquietude they experience. Kids fear the sudden responsibility and worry about their ability to fulfill their obligations to their parents. Frequently, parents occupy such an elevated position in the estimation of their children that a desire to please overwhelms duty.
We recommend an honest discussion. Share your fears with those you love. Explain why you have concerns. Show them this newsletter. We can help. Our Letter of Instruction binder is a start. It includes information on what to do in the event of the loss of a family member and a checklist for spouses. Family meetings are an excellent means by which to ensure intergenerational stewardship. We have often facilitated family meetings. A family meeting agenda is included in our binder. Many people have successor trustees in multiple states. We are happy to host a group meeting via GoToMyPc©. We also host meetings in our conference room and at people’s homes. Please feel free to talk to us about how we can help.