ESTATE PLANNING INCLUDES PREPARING YOUR HEIRS
Not only do you need to prepare your assets for transition to your heirs but you also need to prepare your heirs to receive your assets. Larry Swedroe, director of research for the BAM ALLIANCE, says the success of an estate plan may depend on preparing your family for the transfer of values as well as wealth.
In an article for Advisor Perspectives, he poses five questions that should be asked to determine if heirs are prepared to receive your assets:
- Do your children know your estate plan?
- Have your heirs read your will or other estate planning documents?
- Do they know the family's net worth, both yours and their own?
- Are your heirs in communication with your team of advisors?
- Have they been involved in the formation of the Investment Policy Statement, and are they familiar with the investment strategy, the goals and how to manage the assets?
Swedroe writes, "Unfortunately, in the majority of cases, families treat money and the issues surrounding wealth as taboo subjects. And the 'lessons' of non-involvement get passed on from one generation to the next. Thus, in most cases the answers to the above questions are 'no' -- and that explains why the failure rate is so high."
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