You might feel awkward discussing your estate plans with your children. It is natural since inheritance matters involve your death, which is not a pleasant subject to think about. Nonetheless, you may want to bring up the matter with your children or perhaps you want to talk about it with your own parents. There are some reasons why discussing an inheritance may be important for your family.
Problems may arise if you die and your children do not understand your inheritance decisions. There may even be potential for estate litigation. Talking about inheritance issues might prevent conflict. CNBC provides some examples of inheritance matters worth discussing.
Inheriting money in general
Your children might want to know if they are inheriting any amount of money so that they can factor it into their financial planning. They could have certain financial goals in mind like a retirement plan and want to set up ways to fund them. If they know they have an inheritance in their future, they can plan for whatever they will receive.
Inheriting a large sum
If you have recently come into a lot of wealth, consider how your children may react if you were to pass it to them. Some adults do not react responsibly. They believe that there is no need to build up their own wealth if they are going to inherit a lot of money. In this case, you may want to hold off discussing the issue until or unless they mature in their financial habits.
On the other hand, some children do not react well when they receive a large sum with no warning at all. It can even have a traumatizing impact. In this instance, it may be better for your heirs to know what is coming their way after you die.
Splitting an unequal inheritance
Some families split an inheritance equally between children. However, you might have a special needs child who cannot earn a living. If so, you may need to give your special needs son or daughter a greater inheritance. If you have other children who can sustain themselves, you should consider letting them know why their sibling will receive more from you.
Passing on small items
You probably have not listed all of your possessions in your will, preferring to pass unlisted items as part of your estate and allow your children to divide them among themselves. However, this could lead to fights among your heirs. One or more of your children may want an old book or painting if only because they attach sentimental value to it. Discussing who should get seemingly insignificant possessions before your death may actually prevent discord.