How to Talk Discreetly to Your Parents About Inheritance Planning

Speaking about death and finances – probably some of the most difficult things to do.  However, we hear time and time again of issues arising for families once key members have passed on.  Issues that could have been easily avoided if people had just discussed them whilst the key family member was alive.

UNHWs are likely to have a myriad of advisers in place that discuss inheritance planning regularly and ensure a smooth succession, but what about the many HNW families who don’t?

Many affluent individuals hesitate to discuss their long-term financial wishes with the next generation. However, avoiding these conversations can leave inheritors struggling to navigate a challenging web of assets and legal issues alone.

So how does one bring up such a delicate conversation and what should you be asking?

Unsurprisingly, the first question to your parents shouldn’t be “How much money are you leaving me?”. This is also one of the least important questions when you start discussions with parents.  Whilst the value of your parents’ estate will dictate important things like tax and financial planning, the reality is that it is often navigating the administration, badly drafted Wills and distribution of sentimental items that cause the most problems within families.  If your parents aren’t upfront about divulging their inheritance plans, this is likely to get them on the defensive and it’s unlikely the conversation will end with you being any further forward in understanding their inheritance plans. 

Understanding the Importance

Discussing inheritance planning is not about ensuring your financial future but about respecting your parents’ wishes and protecting the family’s legacy. The primary goal is to ensure that you support your parents with their wishes and understand the practicalities of what happens when they pass.  This should all mean that whilst you are in the midst of an emotionally challenging time, the practical side is as simple as possible for you.

Timing and Setting

Choosing the right time and setting is crucial for these discussions. Look for a private, relaxed environment where interruptions are minimal. Large family gatherings might not be the best occasions for such serious talks, but small intimate dinners or catch-ups are likely more appropriate.

Remember you’re unlikely to have one conversation where you discuss and solve all of your parents’ inheritance planning.  So do be patient and remember this is a collaborative process with your parents.

Framing the Conversation

Above all, approach the topic with sensitivity and respect. Here are some things to consider:

Don’t make it too formal:  Introduce the topic in a relaxed way, perhaps by stating you have been reading Bentley Reid’s Inheritance series which has prompted your thinking.  It might be useful to suggest sending them a link and initially just saying they might find it interesting.

Don’t overwhelm them with detail:  Whilst we hope you will feel like inheritance planning experts after reading this series, bombarding them all at once with everything might be a bit too much.  Instead, begin with something easy such as “Do you have a will?” or “Who should I speak to when you pass regarding administering your estate?”.  These simple questions should give you a good basis to understand the level of planning your parents might have undertaken and think about when to ask additional questions.

Express Your Concerns for Their Wishes: Begin by expressing your concern for ensuring that their wishes are respected. Let them know that you want to understand their priorities to honour them effectively.

Focus on Collaboration: Emphasise that this is a collaborative effort to protect their wishes. This approach helps in making them feel included and valued in the planning process.

Highlight the Importance of Planning: Explain that proactive planning can prevent potential conflicts and challenges down the road. Mention that you’ve read or heard about families who faced difficulties due to lack of planning and you want to avoid similar situations.

Key Topics to Discuss

When you go through this process with your parents, consider addressing the following key areas:

Executor and Trustee Roles: Discuss who will be responsible for executing their will and managing any trusts. Ensure that these individuals are willing and capable of fulfilling these roles.  If they choose a family member and one sibling over another, ensure this is discussed with all family members and an explanation given.

Current Estate Plan: Ask if they have an existing estate plan and if it’s up to date. Estate plans should be revisited periodically to account for changes in family dynamics, laws, and personal wishes.  Usually this is undertaken every 3-5 years.

Healthcare and Personal Care: Discuss their preferences for healthcare and personal care in case they become unable to make decisions for themselves. This includes living wills, healthcare proxies and power of attorney.

Asset Distribution: Understand how they intend to distribute their assets. Are there specific bequests to family members, charities, or other entities? Clarity here can prevent future disputes.

Tax Implications: Address the potential tax implications of their estate. Ask if they have consulted with tax professionals to minimise tax liabilities.

Ongoing Management: Talk about plans for managing ongoing financial needs, including retirement and long-term care. Ensure that there are sufficient funds allocated for these purposes.  Discuss how they would feel if the family home needed to be sold to fund their care for example.

Navigating the Emotional Undertones

These conversations can be emotionally charged. It’s essential to remain patient, empathetic, and understanding. Acknowledge any discomfort your parents may feel and reassure them that your primary intention is to respect and fulfill their wishes, understanding their exact wealth is not your primary goal and you shouldn’t be surprised if you still don’t know this at the end of the process.

Leveraging Professional Help

Engaging professional services can provide additional support and expertise and is often crucial. Consider suggesting a meeting with a wealth management firm like Bentley Reid.  Professional advisors can facilitate these discussions, provide objective insights and help structure an effective succession plan.

Bentley Reid is here to assist your family with comprehensive estate planning services, ensuring that your family’s legacy is protected and that your parents’ wishes are honoured. Our goal is to be a trusted partner in navigating these complex and emotionally nuanced conversations, providing you with the expertise and support needed for effective succession planning.

Conclusion

By approaching the topic with sensitivity and a collaborative mindset, you can turn these challenging discussions into opportunities for understanding and mutual respect, ultimately securing your family’s seamless transfer of wealth and long-term financial security, whilst minimising conflicts.

What to do next:

Bentley Reid will be sharing more content around inheritance and succession planning.

Need more advice? Reach out to our experts:

Anna Warren – Tax Director

anna.warren@bentleyreid.com

Mike Winstanley- Director, Wealth Management

mikewinstanley@bentleyreid.com