Have you had “the talk” with your kids? No, not that talk: if your kids are adults, we’re pretty sure you can check that one off the list. No, we’re talking about “the talk” that can be every bit as awkward and uncomfortable. It’s the discussion that happens when you sit down with your adult kids to talk with them about your estate plan.

Admittedly, depending on family dynamics, discussing your estate plan with your likely heirs might not be so bad, especially if you’ve always been able to communicate easily and openly. But sadly, that level of openness is not the norm. In many families, talking about mom and dad’s estate plan means talking about two taboo subjects – money and death. That’s why millions of adult kids never know of their parent’s wishes and plans until mom or dad is gone.

In this recent article from Kiplinger, financial advisor and writer Jacob Wolinsky argues that it doesn’t have to be that way, provided that parents take the bull by the horns and seize the opportunity to help their kids understand the what, why, and how of their estate plan. Some of these tips are pretty basic, we admit, and Wolinsky may have left some critical elements out. Still, this article represents a helpful starting place – so let’s see what the writer suggests.

Estate Planning: A Tough but Critical Topic for Conversation

While Wolinsky understands the awkwardness inherent in it, he calls estate planning “one of the most critical and delicate subjects to broach with your loved ones.” That, he adds, is “because it is an essential part of ensuring that what you want will be accomplished when you’re gone.”

Bringing everything out into the open before your death is the easiest way to prevent discord after your passing. By contrast, keeping too many things hidden can set the stage for major family battles. 

“This is critical,” Wolinsky writes, “because multiple studies have found that family discord is the biggest risk to the continuity of family wealth across generations. According to a report from JPMorgan, the estate planning firm the Williams Group attributes 60 percent of breakdowns in wealth transfer to a lack of communication and trust.”

The JPMorgan report emphasizes that point with blunt clarity. “Numerous studies have shown that the biggest risk to the continuity of family wealth across generations is family discord,” the report states. “In fact, it’s a bigger risk than market or portfolio risk or estate taxes.”

But how do parents broach this important topic? Wolinsky gives us the following tips.

First, Get Your Own Estate Plan Into Shape

While this may seem obvious, it needs to be stated: first, make sure you have a solid estate plan in place before you discuss it with your loved ones.

“You may be wealthy enough to need estate planning for millionaires. Or you may be struggling to save money on estate planning,” Wolinsky writes. “In either case, you will need to designate who will inherit your assets and who will make your end-of-life healthcare choices (called an advance directive). Talk with your partner or spouse first and get on the same page before discussing the plan with the rest of your family.”

Rajiv would add that comprehensive estate planning requires far more than what Wolinsky is suggesting here. Remember, this article is talking about the basics.

What Documents Do You Have – and Where Are They?

The next step is a bit more concrete and practical: tell your family what estate planning documents are already prepared and where they can be located. This list should include your will, financial statements, and other important paperwork, along with details and contact information for your estate attorney, accountant, or other professionals involved with the transfer of your assets. (Don’t forget passwords for access to online accounts.)

“In many cases, financial decisions may need to be made quickly after you’re gone, but your family won’t be able to act if they can’t find your pertinent documents and paperwork,” Wolinsky writes.

He adds that it’s a good idea to provide some “basic training to help those you plan to leave in charge of your finances to be able to make wise decisions as the end nears, and in the weeks following your passing.”

Discussing Estate Plan Details Affects Loved Ones Emotionally

Wolinsky notes that there’s a real potential for extreme emotional responses when discussing estate planning with family. This is partly due to the pain of considering a loved one’s eventual passing. But there are also more practical triggers for emotion.

“For example, many adult children are surprised about the size of their inheritance because they expected either significantly more or significantly less than what their parents left behind,” he writes. “And if you have put guardrails in place so your heirs don’t blow their inheritance, they may feel that you don’t trust their judgment.”

These emotional responses can be compounded if you decided to divide your estate unequally. If you do, communicating your reasoning beforehand can really help reduce conflicy. “For example, if one child has a severe disability or another has many children, you may want to provide more support to that child. Talk to your estate lawyer about how best to structure these differences in your plan and you should present these differences to your family,” Wolinsky writes.

Look for Ways to Minimize Emotional Overload

The goal here is to try and restrict surprises about what the financial landscape will look like after you’re gone. Death is emotional enough without unexpected details.

“For example,” Wolinsky explains, “if you left a much larger financial legacy than your children had been expecting, they may feel too overwhelmed to be able to handle the transfer of wealth wisely. On the other hand, leaving behind a much smaller nest egg than what your children were expecting can make it challenging to figure out how to wrap up your financial affairs, especially if you’ve also left a large amount of debt behind.”

The terms of your will can also be an unexpected surprise, especially if those terms have different ramifications for different family members. “However, it’s important to communicate these individual concerns before you pass so that your heirs don’t feel resentful because you left them less than what you left someone else,” Wolinsky adds.

In Your Estate Plan, Choose Your Executor Carefully

It’s important to be realistic when choosing the person to execute your estate plan. But there are situations, as Wolinsky notes, where you may want more than one of your beneficiaries to be in charge of the distribution of your assets. That protects the family in case one beneficiary is not able to fulfill this duty.

However, this set-up can come with its own challenges, though. He explains, “If you only choose one person, your other heirs may feel resentful that they weren’t allowed to participate in the process. On the other hand, piling all the responsibilities onto one person may make them feel overwhelmed, especially if they are dealing with their own challenges at the time.”

Large assets like family businesses are another, more complex consideration. “Not every child wants to follow in their parent’s footsteps and maintain the family business,” Wolinsky writes. “Therefore, it’s important to have discussions about this issue beforehand and put plans in place to liquidate the family business upon your passing if your children don’t want to be involved.”

Communicate Early and Often with Loved Ones

Wolinsky concludes, “Discussing estate planning with your family can be a real challenge, but with a little planning and some explanations, the transfer of wealth doesn’t have to result in confusion, resentment, and problems for all involved. Communication is always the best policy, especially when it comes to important life decisions that could impact your loved ones long after you’re gone.”

We asked Rajiv for his opinion on this issue, and he agrees that parents should be the ones to initiate honest communication about estate plans. “We find that a family meeting is a good way to get issues and questions out in the open,” says Rajiv. “There are a hundred questions you and your kids should be discussing, and this article only covers a few of them. If you contact us, we’ll walk you through the process and set up a family meeting with all the key players. It could be the most important step your family could ever take.”

Rajiv Nagaich – Your Retirement Planning Coach and Guide

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(originally reported at www.kiplinger.com)