There are many advantages of including your adult children in the estate planning process. However, knowing when and to what extent to involve your children can be difficult. If you decide to include your children in the planning process, it is critical to remember that it is your estate plan, not your children's.
For many people, involving their adult children in the estate planning process makes sense because estate plans are typically for the benefit of the children. Your inheritance can have a significant impact on your children's future and including them in the planning process can help with the transition.
If you do decide to include your children in the estate planning process, you must remember that it is still your estate plan. Children should only be involved to the extent that you want them involved. It is important to find a balance and remain in control over your estate plan.
Children should not be involved in the estate planning process until after you have considered your own goals and intentions and discussed your plan with an attorney. Your wishes might not always be in line with those of your children. It is important to have the initial meeting privately, because as a parent, you may be reluctant to be honest if your child is sitting right next to you.
Before you invite your children into the estate planning process, you should take time to decide the extent to which you want them involved, and when you start the conversation, be sure to make these boundaries clear. Sometimes adult children are not aware that they have no pre-established right to act as their parents' decision-makers. Sometimes children must be reminded that they have no absolute right to an inheritance.
Whether and to what extent you want your children involved in the estate planning process is an entirely personal decision. However, certain estate planning issues are very helpful to discuss with your children. These topics include:
- Whether your children are willing and able to perform duties - Part of the estate planning process is assigning individuals responsibilities. Some of the roles that may want to assign your children include administrator of the estate, trustee or health care power of attorney. These jobs can require a lot of work and the ability to carry out tough and emotional decisions. It is smart to have a discussion with the person that you are planning to name to ensure that they are both willing and able to perform these duties.
- How you plan to pay for long-term care or medical treatment - If you become incapacitated, it is helpful for your children to know how you plan to pay for long-term care or medical treatment. Health care costs can be incredibly expensive, and you don't want your children stuck with the bill when you had an insurance policy or an account set up to pay out-of-pocket.
- The location of relevant financial and legal documents - You should confirm that your adult children know where your important financial and legal documents are kept and how to access them if needed.
- Your end-of-life health care decisions - Communicating your end-of-life-care decisions, like the existence of a do-not-resuscitate order (DNR), is critical both so your wishes are followed and to help your children emotionally prepare for what might happen during your final days.
The biggest advantage of involving your children in the estate planning process is that transparency can reduce tension between your family members and prevent estate battles from breaking out after your death. This is especially true if you are treating beneficiaries differently. For example, maybe you are leaving a greater share to the child who acted as your caregiver. Or perhaps you are leaving one child's inheritance outright, while putting your second child's inheritance in an incentive trust. Taking the time to explain the reasoning behind your decisions can reduce confusion and fighting.
A second advantage is that to the extent that your estate plan is made to benefit your children, they can provide helpful input on how to best accomplish that goal. For example, maybe your children would prefer that you leave your property in a trust for the grandchildren rather than receiving it outright. The best way to understand your children's needs is to involve them in the process.
Problems arise when an adult child has too much influence over the decision-making process such that the estate plan is a reflection of the child's wishes, not the parent's. Children must understand the estate plan is to be based on what the parent wants, not what they or someone else wants. This is of particular concern if the parent is experiencing diminished capacity.
If someone suspects that an individual had “undue influence” over the will, they can petition the court to invalidate the will. Each state has its own laws relating to what is required to prove undue influence. In general, undue influence may be found if:
- There was a relationship of trust between the deceased and individual.
- The individual actively participated in the creation of the estate plan.
- The individual substantially benefited from the estate plan.