If you are afraid about having a family discussion about estate planning, you are not alone. But as our attorneys have learned from years of experience, if your family doesn’t talk about estate planning, including incapacity, death, or money, your heirs aren’t likely to know what to do if and when you become incapacitated, when you die or how to manage your assets when they become their inheritance. This is all too often the case, but it doesn’t have to be; according to a recent article from Madison Daily Leader, “Are your heirs ready to receive an inheritance?”

When an inheritance arrives, it’s accompanied by emotional, financial and legal issues. Having everyone prepared and informed can make the difference between a squandered inheritance, an inheritance consumed by taxes, or an inheritance wisely managed and benefiting one or more generations.

There are key issues to discuss, including matters to cover with an estate planning attorney.

Holiday Family Discussion Topics

  1. Discuss incapacity and what to do: Communicate with your family about your estate plan, which is more than a will. Incapacity planning includes a Power of Attorney and Healthcare Power of Attorney, two documents allowing you to name someone else to act on your behalf if you cannot express your wishes. A living will, also known as a medical directive, tells loved ones your wishes regarding end-of-life care. With it, your family will know if you want to be kept alive by artificial means. Without it, they’ll have to guess.
  2. Share the details: While a will is important in Missouri if you have minor children because it is the only document in which you can name a guardian, but it should not be your only plan because it ensures that your property goes through court to be inherited. Being diligent about designating beneficiaries on the titles to your property, or better yet, creating a trust and transferring you property to it, will make for a smoother transition. Sharing the details of your plan allows loved ones to know what to expect. They may not all be happy with your decisions. However, it won’t be a surprise and will be less likely to spark disputes after you have passed.
  3. Prepare them to receive your property: Do your heirs know how to manage money or other assets? If you’re leaving your heirs wealth in the form of stocks, real estate, IRAs, 401(k)s, cash, or cryptocurrency, they’ll need to be prepared to accept the assets. If your estate includes a vacation home, is there a plan for sharing it among heirs? These issues will be more manageable, if heirs understand what they are inheriting and what they’ll need to do.
  4. Tax issues: An estate plan should address taxes for the people creating the plan and their heirs. While your family may not have to worry about federal estate taxes, some states still have inheritance and estate taxes. Withdrawals from certain types of inherited accounts may incur state and federal income taxes, which could take a bite out of their inheritance. If inherited assets are sold for more than they were worth at the time of inheritance, there may be capital gains taxes.
  5. What expenses need to be paid: Every estate has some expenses to be considered, including funeral costs. If the decedent has a mortgage and the home is left to heirs, they may need to sell it quickly before expenses mount. The estate plan should include an inventory of all liabilities and assets, so the executor can address any outstanding debts.

There’s a lot to unpack when managing an estate. Start by having an estate plan created with an experienced estate planning attorney or update an existing plan to be sure that it still achieves your wishes. Reach out to the team at Frankel Rubin for help.

Once you have talked to us about what is important and allowed us to answer your questions about the above topics, it is time to have a family discussion so your heirs understand your intentions. Leaving a legacy of caring takes many forms, and this is one of them.

Frankel Rubin’s attorneys are licensed in Missouri and Illinois and our law firm services all of the St. Louis Metropolitan Area. We are especially convenient for estate planning in Clayton, Brentwood, Des Peres, Frontenac, Glendale, Webster Groves, Kirkwood, Ladue, Maplewood, Olivette, Overland, Richmond Heights, Rock Hill, Shrewsbury, Town and Country, Creve Coeur, Affton, Crestwood, Sappington, Sunset Hills, Maryland Heights, University City, Warson Woods, and St. Louis City.

Reference: Madison Daily Leader (Nov. 23, 2024) “Are your heirs ready to receive an inheritance?”