Planning for the future is both natural and encouraged, especially in the financial industry. As such, families should do their best to leave future generations prepared for when the worst happens.
Unfortunately, planning often results in some uncomfortable thoughts and conversations. Nobody likes having conversations surrounding death – especially not their own. Yet, it is beneficial to the family, especially when it comes to inheritance and tax planning.
Benefits of Talking and Planning
Many people may decide that the uncomfortable nature of the subject at hand outweighs the benefits of having that conversation. But the truth is that families face many positives should they have an open discussion about inheritance taxes.
By bringing up the conversation beforehand, one ensures that the entire family is on the same page. In other words, every family member should (theoretically) know how much they stand to inherit, cutting down on family disputes.
Finally, planning ahead can allow a family to mitigate their losses through taxes. Inheritance tax takes increasing percentages of an estate, depending on the value. With careful planning, this can be mitigated.
How to Start a Conversation
Younger generations may worry that they’ll come off as money-hungry for bringing up an estate before an elder’s passing. While it can be a delicate situation, the results will undoubtedly result in higher confidence and bonding overall.
The key to starting any conversation is to go into it with sensitivity and the willingness to be understanding. Listen to what others have to say, and don’t push any single idea of objective too heavily.
The main goal here should be getting the whole family in agreement on a plan. Depending on the number of family members involved, this may take a while. However, it is critical to remember that ultimately this decision will fall to the person whose estate is in question. As such, they deserve the respect of having the final say.
That final say may mean that they don’t feel comfortable talking finances with the rest of their family. While having a frank conversation early on is beneficial, there’s no way to force it. Instead, please encourage them to seek professional guidance, knowing that professionals will do their best to mitigate these concerns before they hit a critical juncture.
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