Isn’t estate planning only about taxes?
This is a common misconception. Comprehensive estate planning takes the whole person into account. It involves selecting trusted individuals to carry out one’s wishes and drafting documents that carefully guide and protect future generations. Estate planning also goes beyond taxes, wealth, and medical decision making: Many people choose to include things like recorded oral histories and precious heirlooms in their plans. This makes estate planning not just about property, but about the legacy, values, and vision you want to pass along to future generations.
I thought trusts only dealt with property. How can a trust be used to pass along my values?
There is actually a huge diversity of types of trusts, and part of estate planning is picking the ones that work best for you, your family, and your goals. In terms of passing your values to the next generation, educational and incentive trusts can promote or discourage certain life choices. For example, someone who prizes their family vacation memories might create a fund for that purpose. Additionally, charitable trusts or foundations can pass along your personal mission of philanthropy.
What should I tell my children about my estate planning?
There is no cut-and-dry rule for what you should and shouldn’t tell your children about your estate planning, but it’s usually a good idea to err on the side of more information rather than less. It’s a good idea to tell your children the reasons behind your decisions, so they understand how your values translate into your plan. Sharing your perspective far in advance using important documents like your health care directives can also reduce stress on your family in a difficult moment down the road. It is also an excellent way to reduce (or even eliminate) family infighting that sometimes occurs after death if your children have heard directly from you about the reasons for your decisions.