Although it can seem challenging, communicating your estate plans with family is a key step in ensuring that your wishes are honored after your passing. These conversations can seem difficult and daunting, but having a plan and keeping everyone informed can provide a sense of clarity and security for your loved ones. In May, the Community Foundation held an exclusive event for fund donors and their advisors, featuring an expert panel to discuss tips to consider when creating and communicating your estate plans with children or heirs. Here are some of the tips that were shared during the discussion.

From left, estate planning panelists John Kemper, Farhad Aghdami, Ann Ramage and David Lyons.

1. Organize Your Documents and Update Them Annually (and don’t forget about passwords!) 

John Kemper, Community Foundation Board Treasurer, and retired CEO of the KLMK Group, shared that his approach to estate planning stems from his experience after his parents passed. He desired to approach the situation differently with his son. He emphasized the importance of getting organized and involving his family early. “First, you need to gather all of the relevant information and documents,” he shared.   

About a year ago, John created a notebook containing all his estate planning documents and plans. His helpful Estate Planning Documents Table of Contents includes items like burial instructions, financial account information, Community Foundation charitable fund documents, medical directives, passwords, social media accounts and more. 

“It’s much more than just information about your assets – that’s only a part of it,” John shared. He also reiterated that it is critical to review and update your plans annually and communicate all major changes with your advisors and your family. Updates may be prompted by something as complex as new tax laws, or as simple as changing a password on an account. Regarding passwords, it is not just your financial accounts that need access – consider your phone PIN, your email address, and passwords to social media accounts! Software exists to help organize the above documentation and phone apps like Keeper to record and secure all your passwords in one place. Consolidation of this vital information will make it easier for your family or trusted advisors to access what they need after your passing. 

2. Involve All of Your Advisors in the Planning Process 

If you do not have one, build out a team of advisors: a financial advisor, CPA, estate planning attorney, your philanthropic advisor at the Foundation, life insurance agent, etc.  Include them in your planning from the initial stages – “It’s really important to get everyone working together as a team,” shared Farhad Aghdami, Managing Partner at Williams Mullen. 

“Bringing all your advisors together allows you to benefit from multiple points of view and will facilitate a more robust and well thought out plan,” added Ann Ramage, CPA, and Partner at Keiter. “This could help reduce assets missed or not considered, or your advisors can brainstorm options together.”  

3. Have a Family Meeting and Communicate Your Named Executor 

Once you have all your information gathered and your plans documented, schedule a meeting with your family and have an open and honest discussion about your intentions. “You should never assume that your children know your intentions, and it will almost always be up to you to initiate the conversation,” Aghdami said. 

This is a good time to communicate who you will appoint as your executor or communicate any difficult decisions you may have made. Be sure to give everyone enough time to ask questions and voice any concerns. Additionally, it is also important to keep them updated about any changes you make to your estate plans. “Family conversations don’t have to all be heavy and you don’t have to give all the details right away, you can layer it over time,” shared David Lyons, COO at Brockenbrough. “There’s no one way to do this, it’s just important that you do it.” 

4. Educate Your Family and Set Your Executor Up for Success 

As you involve your family in your estate plans, this is a perfect chance to educate them in financial planning, especially if they are not particularly savvy. David Lyons suggested you may wish to create a checking account for your executor to have easy access to funds to take care of initial expenses, like funeral costs or legal fees. John Kemper noted that you can pre-pay your funeral expenses and even a set number of death certificates. Many funeral homes will reimburse a family for funds not used for the burial and services. 

It is also important to have a practice run with your team of advisors and your executor, so that everyone understands what happens when the time comes, so you can identify anything that has been overlooked or what more can be done to help everyone feel more prepared. The practice run can give confidence to your team as emotions will be a factor when your plan needs to be executed. 

5. Pay Attention to Titling of Assets and Beneficiary Designations 

The panelists agreed that it is critical to stay on top of how your assets are titled. “Pay particular attention to the titling of all assets, especially your beneficiary designations. Make sure that you are optimizing the protection of your estate and avoiding probate or other legal challenges,” shared Aghdami. “Re-titling your accounts can be extremely complex and tedious for your loved ones after your passing and, again, there could be tax implications, so get ahead of it now. And know that an active beneficiary designation will almost always override a designation laid out in estate documents.” Thinking through secondary or back up beneficiaries on accounts can be helpful in many circumstances.  

Too often, clients set up revocable trusts and then do not fund them. Said Ramage, “Go ahead and fund the trust to protect your assets, avoid probate and the heavy administrative burden on your heirs and executor.” 

6. Consider How You Might Accomplish Charitable Goals During Your Lifetime and Involve Your Family 

It is important to have conversations about your legacy and charitable wishes with your family. Doing so may give them more purpose and energy to proceed with your intentions during their grief. Kemper shared, “Most children know their parents are charitable, so it shouldn’t surprise them if you want to give to charity; but don’t let them find out after you’re gone.”  

Ramage added, “As you review charitable goals included in your estate plan, consider whether other options or methods are available for you to accomplish them during your lifetime.”  For example, opening a Donor Advised Fund (DAF) at the Community Foundation is one way you can involve your family in your charitable decision-making, so they can witness the impact you are making on the community and understand how to carry out your philanthropic legacy. 

Using a bequest fund or making a bequest provision at the Foundation can also streamline a donor’s philanthropy. The Foundation and the fund can be named as a beneficiary of an asset or as designee, with an outline of which nonprofits you want to support. If you change your mind, it is a simple (and free!) change in documentation at the Foundation rather than in your estate documents   

It may also help simplify the steps for your executor or your family later and may provide you with some privacy if you want to make a gift or larger gift to a specific individual or organization. 

7. Get started. 

If you are having difficulty knowing how to initiate the conversation, use this article as your motivation! Share it with your family to invite them to one of the most important conversations you can have. As the phrase goes, no one escapes death or taxes. Being prepared in this moment is truly one of the greatest gifts you can give your family. You are also setting a precedent that will hopefully be replicated for generations to come. 

---

 

If you would like to learn more about how the Community Foundation can help you or your clients, or if you have questions about philanthropy, please reach out to Brandon Butterworth, Vice President of Philanthropic Services, at bbutterworth@cfrichmond.org