PASSING ON VALUES NOT JUST VALUABLES
Often the first thing people think of in estate planning is “How do I handle my stuff?†The question then goes to who’s going to handle it, when and how? We find ourselves at the beginning of an unprecedented transfer of wealth from one generation to the next (the “baby boomersâ€). Despite this tremendous transfer of wealth, a 2005 survey commissioned by Allianz Life Insurance Company and the consulting firm, Age Wave*, found that the non-financial aspects of leaving a legacy are 10 times more important to parents and their children than the financial aspects. However, while estate planners seem to be addressing the financial or tax aspect of this transfer, estate planners are not doing a good job of addressing and handling these family values and traditions, memories and stories, and personal possessions with emotional value.
THE GENERATION GAP
This survey also showed that family conflicts often arise over the fulfillment of last wishes, selection of personal representatives, or distribution of sentimental personal possessions. In fact, distribution of personal possessions was five times more likely to cause family conflicts than the amounts and distribution of money. Thus, efforts by parents to carefully protect and distribute cash assets, were often overshadowed by the failure to appropriately consider and handle family relationships or traditions or personal possessions.
LEAVING MORE THAN JUST “STUFFâ€
There are numerous ways families can convey values, family histories, and non-financial legacies and ensure a smooth transition to the next generation.
- First, think about leaving a legacy, rather than just a division of your “stuffâ€.
- Second, write your history. Help your children and grandchildren better understand who they are by helping them to remember who you are.
- Third, hold meetings with your children and advisors before a crisis arises to ensure that everyone understands your wishes. This will reduce the potential for later misunderstandings.
- Fourth, teach and train your successor trustees and personal representatives to help them perform their duties effectively. The more they know, the better they can carry out these responsibilities and avoid contention within the family.
- Finally, explain to your advisors – your attorney, financial advisor, insurance agent, etc. – that you intend to leave more than “stuff†to your children and their children. Seek their help in leaving a legacy.
*Full article found here: https://www.allianzlife.com/MediaCenter/PressLegacies.aspx
