Creating a comprehensive estate plan is a powerful move, complete with advanced directives and POA’s in place. We repeatedly witness how these steps provide immense peace of mind for our clients. Once an estate plan is in place, there is a delicate balance to strike when it comes to ensuring heirs know what they need to know, without disclosing information you feel is too sensitive, personal, or “none of their business….yet.”
What to Tell Heirs About Your Will, Trust, or Other Estate Information
First and foremost, it’s essential to realize your estate plan (unless you create an irrevocable trust) is a living document that can be edited or changed as you wish or as circumstances dictate amendments. In fact, we recommend revisiting your estate plans every year. You’d be amazed at what might surprise you or is no longer relevant, requiring amendment.
There is absolutely no reason to disclose any details you don’t want to about your estate. We recommend not disclosing too many details for the “circumstances may change” reason cited above. However, there are things worth sharing with heirs.
That you have a will or estate plan
At the very least, heirs must know you have a will or estate plan in place. If you’ve created trusts or plan to create trusts, the other trust holders must be informed, so your attorney will facilitate that process for you.
Where your estate plan is located
If you use an estate planning attorney, all you need to do is let your heirs know that you’ve created an estate plan and that it’s filed with Attorney XYZ, along with the attorney’s contact information. Upon your death, they contact the attorney, and the process unfolds from there.
Advanced Directive Information
We do advise holding a family meeting (or Zoom gathering) with key family members and/or close friends to discuss your advanced medical directive. You should also share copies of it with your general physician, healthcare team, and (potentially) each member of your family.
If you become incapacitated it’s nice for them to have heard and read your wishes ahead of time, so they are prepared. The same is true for your end-of-life plans.
A list of all of your financial accounts
There is no need to disclose any information about account numbers, passcodes or PINs, etc. (although those should be listed with your will or estate plans or in your attorney’s files). However, we do recommend providing a list of the banks/investment firms/or other financial institutions where you have accounts. You can also provide contact information for specific personnel or advisers you work with.
This can help them get the ball rolling and the banking/financial institutions will help your heirs/beneficiaries with how to move forward when that time comes.
Which accounts have direct beneficiary or POD recipients
The nice thing about today’s digital financial world is that almost all financial accounts offer some type of “Beneficiary” or POD (pay on death) option that allows you to directly state who gets the money in those accounts when you die. They can be split between as many heirs/beneficiaries as you want, and you can also specify percentage amounts. So perhaps your two children get 40% each, and your niece and nephew get 10% each.
These transactions are straightforward and don’t require the use of a will or estate plan.
Executors and trustees
You should have a conversation with any executors or trustees (as well as your POA) beforehand so they have the option to refuse the honor. Those roles bear great responsibility and the duties must be carried out in a clearheaded, objective, and timely manner. Once they’ve said yes and you’ve completed all of the necessary documentation, it’s good to give them copies of the necessary paperwork so they are prepared.
Again, they don’t need to know all of the details; those can live in your safe or with your attorney. However, some general information and heads-up about any items that might be a surprise or cause upset are worth knowing about ahead of time.
Estate Information Like Life insurance policy
Not all heirs/beneficiaries know to look for a life insurance policy. If you don’t have an estate attorney and have done basic, online DIY estate planning, make sure the life insurance policy information is known by beneficiaries so they don’t miss out on funds they were unaware of.
In some cases, your beneficiaries may be minors, in which case let a trusted relative or friend know you have a life insurance policy, along with the carrier’s information. Again, there’s no need to divulge details about how much or account information. A simple call is all that they need to make to let the insurance company representatives know. They handle the rest.
Again, your heirs aren’t obligated to know anything at all about your estate plans. However, we feel that the more general an idea they have, the smoother things go when it’s time to begin carrying out your wishes. And, as you can imagine, information regarding your Advanced Medical Directives is the top priority.
Have questions about how to create a stress-free estate plan for your heirs and beneficiaries? Schedule a consultation with Tseng Law Firm. (510) 835-3090