How to talk to grown-up kids about estate plans

A few years ago, my father called a family meeting. He and my stepmother — they married almost a decade ago, after losing their first spouses to cancer — sat down with me and my brother and went over, in detail, pretty much every aspect of his estate plans.

My dad had gone as far as to prepare and print off an agenda for our meeting. His objectives, according to the document he handed us, were:

• to give us all a clear understanding of his wishes in the event of his incapacitation or death;
• to give us a clear understanding of his assets, income, key contacts and documents;
• to discuss any related questions we had; and
• to discuss possible alternatives to his current thinking, and corresponding changes to key documents.

They got the idea for the meeting, says my dad, while listening to an Ideas podcast on their annual drive home from Florida. The two-part episode, “When Families Start Talking,” delves deep into the issues that come up when families grapple with the needs and desires of aging parents, the demands of caregiving, and the dynamics that can come up between siblings when money and inheritance are involved.

“They went through several scenarios where children didn’t have any understanding of their parents’ wishes or desires, and ended up in serious conflict, with relationships destroyed,” says my dad. “We really didn’t want that.”

Keep family meetings businesslike

While my father and stepmother were content to meet around their dining room table, Ian Hull, a certified legal specialist in estates and trusts at Hull and Hull LLP in Toronto, advocates a more businesslike approach. He tells clients to issue a formal invitation to their children, with a neutral place (like a private hotel conference room), a time and an agenda.

“The key to any family meeting is to maintain throughout a business-like approach and environment,” he says. Formalizing the process helps to interrupt family dynamics (read: strife) that can surface in more familiar settings.

Hull will work out in advance his clients’ goals for initial and subsequent meetings: it may take a few go-rounds to get through an entire estate plan, especially for complicated or emotional issues like how to deal with the family cottage. He asks clients to consider just how much information they want to disclose and whether it’s a good idea to invite their children’s spouses.

Although these kinds of meetings are fairly standard for extremely high-net-worth clients, says Hull, they’re less common for the more average Canadian family. My dad and stepmother agree. “When we talked to our friends, none of them had thought of having those kinds of conversations,” says my stepmother. “They’re more likely to talk to their friends than to their children about their estates.”

It’s easy to see why such meetings aren’t so common. The same cultural bias that lets people procrastinate about creating wills and estate plans applies here: people are loath to talk about death and money. Or they don’t think their estates are complicated enough to warrant a formal meeting, even though Hull has found that the most contentious issues are usually the smallest ones, like the choice of an executor or who gets that antique chair. These meetings are a chance to deal with those minutiae, and often act as a gateway to talking about bigger financial issues.

I want to thank my dad, my stepmother — and, for that matter, my late mother — for their gift to me of careful financial planning, and for their openness and transparency about those plans. I’m thanking them for working hard to create an atmosphere designed to minimize conflict and promote goodwill amongst our family members. That’s never an easy task, but it’s even more difficult with second marriages. (Blended families, says Hull, are his biggest source of contentious work.) And I’m paying forward that gift by pledging to do the same with my own children.

The “eyeball effect”

Advisors — especially estate specialists and insurance advisors, who are comfortable talking about death, money and incapacitation — are uniquely qualified to get these conversations going. “I tell clients that they have an unknown liability of complete emotional turmoil and potentially astronomical legal fees,” says Hull. “And I talk about the ‘eyeball effect’: that this is a chance to look your kids in the eye and say, ‘Here’s what I have, here’s what I want to do with it and here’s why. And if you don’t like something about that, we can talk about it.’”

If it takes a bit of work to orchestrate family meetings, the payoff for clients — not to mention advisors — is enormous. Ideally, clients will eliminate that unknown liability, and even learn something about each other. Parents are often surprised by their children’s desires and preferences, says Hull. For example, they may assume that everyone wants to keep the family cottage, but one kid may not be interested.

And when the meetings are over? “It takes a tremendous amount of stress off clients,” says Hull. “It’s akin to the feeling they get after they’ve signed their will, the relief of not just signing the paperwork but reframing the legacy. Nobody likes the fees going into it, but no one complains about the fees going out: clients leave happy, and are happy to pay for the service.”