You may feel uncomfortable bringing up the subject of your estate plan with your beneficiaries, but having these conversations can offer significant benefits, both for you and for them.
Clear communication can help prevent misunderstandings, reduce the risk of future conflict, and ensure your wishes are fully understood. Yet, despite these advantages, research shows that most people still avoid having this important discussion.
According to a study by The National Will Register, 53% of UK adults have not discussed what should happen to their estate upon their death. The study also found that:
- 71% said they would be comfortable discussing their estate plan with their loved ones. However, over a quarter of that group said their loved ones are reluctant to talk about it.
- Around 15% do not believe they need to discuss what happens to their estate after they die.
- 24.5% of those with children have spoken with them about their estate plans. However, around 40% of children have been told where to find their parents’ wills, highlighting a gap between knowing where to find a will and the contents of the will.
Failing to communicate your estate plan with your beneficiaries can leave them unprepared, increase the risk of disputes, and undermine the efficiency of the legacy you intend to leave behind.
Read on to discover five reasons why it’s important to discuss your estate plan with your beneficiaries.
1. Prepare your executors and trustees
In your will, you nominate at least one executor to oversee the administration of your estate. This person will be responsible for managing your affairs after your death, including settling debts, distributing assets, and ensuring your wishes are carried out in accordance with your will.
You may also need to appoint trustees to manage certain assets you place in trust.
In both cases, it’s important to speak with your chosen executors and trustees ahead of time. This ensures they understand their roles, are willing to take on the responsibilities, and know what your wishes are and how they can help see them through.
2. Prevent potential disputes
The Guardian reports that around 10,000 people dispute wills every year, and the number has been slowly rising.
Factors behind the increase include:
- Rising property prices
- Increases in second marriages leading to stepchildren being disinherited
- A rise in dementia leading to more claims that wills were not properly drawn up.
By openly discussing your will and estate plan with your loved ones and beneficiaries, you can open up the space for them to express their concerns and potentially find common ground. This can go a long way in preventing disputes and building a sense of unity within the family.
It can also help ensure your beneficiaries are clear that you were of sound mind when you took decisions and it gives you the chance to explain them.
3. Set up realistic expectations
Through open conversations with your beneficiaries, you may discover that they are counting on your inheritance to help them achieve significant personal goals, such as buying a property or starting a business.
However, it’s important to ensure they have realistic expectations about what they might receive and when. They may need to explore other financial options rather than relying solely on your estate.
Talking to your beneficiaries early can help manage these expectations, reduce potential disappointment, and empower them to make informed decisions for their future.
4. Find out what your beneficiaries want or need
Your beneficiaries may have specific needs or preferences you’re not aware of.
For example, while you may have intended to divide your estate equally among your children, one might value receiving a particular asset instead of a monetary inheritance, perhaps due to their financial circumstances or a sentimental attachment.
While such arrangements could potentially be sorted out after your passing, it’s far easier – and far less likely to cause conflict – if you discuss these matters in advance and formalise any agreed changes in your will.
5. Make your legacy efficient
Talking with your beneficiaries about your estate plan could also help to improve the efficiency of your legacy.
Depending on your beneficiaries’ circumstances, it may be more practical to structure certain gifts in a way that aligns with their financial situation. For instance, it may be beneficial to set up a trust to pay for the education of a younger heir, or to gift assets while you’re alive rather than leave them in your will to help your beneficiaries in the shorter term.
Get in touch
A financial planner can work with you to create a watertight estate plan that helps minimise the potential for future conflicts and ensure your beneficiaries are well supported after you’re gone.
To speak to a financial planner, get in touch.
Email us at hello@vwmwealth.com or call us on 0141 229 4004.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or will writing.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
