Thanksgiving Dinner Is a Perfect Time to Discuss Estate Plans

Editors' pick: Originally published Nov. 15.

You may not want to spend your Thanksgiving holiday doing anything other than online shopping, stuffing your face and taking a long tryptophan-induced nap, but estate planning waits for no one.

As it stands, you're already doing little to prepare for what happens after you, your parents or your grandparents pass away.

According to a recent study from the Center on Wealth and Philanthropy at Boston College, an estimated $59 trillion will be transferred from 93.6 million American estates between 2007 and 2061. This, alone, wouldn't be so bad if people kept track of their estate planning documents or informed potential beneficiaries about their plans.

More than half (56%) of American parents have a will or living trust document, according to a Caring.com survey of adult children. Nearly one-third of parents (27%) do not have estate documents in place and 16% of adult children are unsure if their parents do. Of those who have a will, just 40% have updated it in the last five years. Almost a quarter of adult children don't know if their parents' will has ever been updated.

Even when estate documents exist, (52%) of adult children don't know where their parents store them and 58% percent don't know what's in them.

"Wills and estate documents can be a touchy subject, but they are necessary conversations to have," said Andy Cohen, CEO of Caring.com. "Too often the surviving family members are left not knowing where to find the documents, or worse, have to go through a lengthy and expensive legal process because no documents were ever created."

This is why, each year, many advisors suggest using Thanksgiving and the winter holidays to discuss estate planning and let family members know about future plans. It's a time when families are getting together anyway and, even if it's not all that lighthearted, families are at least cooperating enough to get everybody through it in one piece. If ever there was a time for families to discuss wills, trusts, inheritance, charitable contributions and other obligations, this is it.

"The key to it, quite frankly, is not having the element of surprise," say Kim Dula, a partner at Friedman LLP "If mom and dad are serious about having a discussion with their family about their estate planning intentions, they have to let the family members know that this is going to occur while the family is together. It can't be the family just sitting down to Thanksgiving dinner and an estate planning issue comes up."

In fact, it's a good idea to give the family a little warning that a family meeting of any sort will be happening during the holidays. If there's a wedding coming up, a baby on the way, a major windfall (lottery winnings, family business transactions, etc. ) to discuss or even setbacks like job loss or a death in the family, it's worth using the holiday to discuss it and letting the family know that a conversation is coming. However, if your family hasn't done this before, advisors suggest having an initial big-picture meeting to talk about long-term plans and loose ends.

"Whenever something major changes, a general meeting can give family members permission to talk frankly about the long-term implications, financial and otherwise," says Anthony D. Criscuolo, certified financial planner with Palisades Hudson Financial Group's Fort Lauderdale, Fla., office. "Don't make decisions at the first meeting. Instead, try to achieve understanding between various family members about financial matters."

Wealthy families can use this as an opportunity to set up charitable trusts and other philanthropy. If there's a family business, family members may want to use that meeting to update the rest of the family on business performance or dynasty trust or the succession plan for that business.

They aren't always comfortable discussions, which is why more volatile families might want to use this as an opportunity to prevent family members disputing a will and causing discord. Criscuolo says people have to face some tough questions: Does the money "belong" to those who built the wealth or is it a family resource to be shared? If it's the latter, shared by whom specifically? What is the wealth best used for in the long run? What is the family's responsibility to its individual members, and vice versa?

"Whatever the older generation decides, the decision will almost certainly be easier to handle in a lifetime discussion than as a complete surprise when the will is examined after death," he says. "Not all conflicts can be resolved through simple discussion, of course, but honesty and transparency make it much more likely that a compromise will be found."

According to Nicholas Wooldridge, a Las Vegas attorney, nine out of ten times, the people fighting over the estate end up in worse financial shape because they've given their attorneys a chunk of their inheritance. If the deceased's children didn't get along while their parent was alive, there is no reason to believe that parent's death will help patch things up.

"When a parent dies, lingering tension between the kids can rise to the surface," Wooldridge says. "As a result, the estate's settlement becomes a battleground for settling old scores."

Those are families that a meeting sometimes just can't help. Jay Freireich, an estate planning attorney for Brach Eichler LLC in Roseland, N.J., notes that families that draft wills, easily distribute assets and communicate regularly don't typically have those problems. Even when there are minor conflicts involved, Freireich notes that the vast majority of those cases end in confidential settlements in which no one admits liability. Then there are the families where two brothers fighting over their dad's estate and where kids from a first marriage battle their father's second wife for assets.

"I had a mother-daughter conflict, I've had brother-brother, most of them are the second-marriage wife and the kids from the first marriage," Freireich says. "I had a case where the kids from the first marriage and the second wife were fighting over a coffee table and we actually tried the case. It wasn't like a special coffee table: It was like a $1,000 coffee table."

Mela Garber, principal at Anchin, Block & Anchin and head of the firm's trust and estates services group, notes that she's seen numerous examples of siblings taking each other to court when the will or trust distribution is unequal. Sometimes it's because one of the children was closer to the deceased parent than the other, but it almost always comes down to a lack of communication.

"After the parent dies, I see litigation between the siblings saying one pressured the parents to give them more money," Garber says. "Kids equate money with love, and when the asset distribution is unequal, they feel less loved, that hurts and that can trigger litigation."

When the family is too dysfunctional for a meeting meeting, Garber suggests a letter from the parent explaining any imbalance in distributions. She also recommends creating a list of personal items and indicating specifically who gets what. If that doesn't work, a will or trust should have contingencies for selling those items and dividing the profits or holding an auction between the competing parties in which the winner gets the item and the loser gets the money bid.

However, it can avoid reaching this stage if families just regularly financial topics. Criscuolo says getting past that initial hurdle is the tough part, but it usually leads to some form of understanding. If a family can head off a meltdown through a series of meetings during various holiday reunions, that's something to be thankful for.

"It's unlikely you'll completely resolve a major problem in a single sitting," he says. "But the best chance of a successful resolution requires calmly listening to different perspectives and keeping lines of communication open."

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