This blog was written by Emily Rosen
Having conversations with beneficiaries and being honest about your intentions will set expectations early on and minimize any surprises during an already difficult time. According to a study conducted by Nielson (2014), 46% of Canadians have not spoken to their family about their intentions for their Will. Of those 46%, the top reasons for not doing so are: they haven’t thought about it (64%); they believe their Will is a private matter (17%); and that they believe it is too soon (11%).
A significant amount of estate litigation is a result of disappointed or surprised family members, whether it’s someone who thought they deserved more, someone who wasn’t happy with asset allocation, or someone who received less than an equal share for whatever reason. All this stress, conflict, and of course, money, could be avoided with a frank and honest conversation. At the end of the day, your beneficiaries are far less likely to challenge your Will if they understand where you are coming from. Remember that this shouldn’t be a one-time conversation – as circumstances change and your intentions do too, keeping your beneficiaries up to date is equally important.
On the other hand, there can be downsides to sharing this information with your heirs ahead of time. For example, it may decrease their motivation to be successful in their own right. Additionally, if unhappiness or conflict can arise if the amount gifted is less than anticipated. It is important to consider your family’s situation prior to having these conversations and determine the degree of transparency that is appropriate for your situation.
On top of discussing the distribution of your estate, it is important to ensure that family members know who is involved in the estate planning process, and how to reach them upon your passing. This could include executors, accountants, advisors, or lawyers. Furthermore, ensure your family members know where your estate documents are and how to access your relevant accounts on your death or in the event of incapacity. Make sure to keep an updated list of your Will, Powers of Attorney, bank accounts, life insurance, pensions, and more.
Regardless of your age, it is never too early or too late to start thinking about estate planning for yourself and your loved ones. Having these conversations with your beneficiaries ensures that they will be better prepared and can give you peace of mind.