Legacy Planning Can Get a Little Awkward. That’s OK 

“To be cringe is to be free,” as the internet’s modern philosophers have proclaimed.

In that vein, great wealth brings great opportunity for families to enjoy life, give back to their communities and empower future generations — though it can also bring awkward conversations.

That’s because the written estate plan is only part of a successful intergenerational wealth transfer, according to Jesica Ray, senior lead advisor at Brighton Jones Wealth Management. Beyond drafting legal documents and trusts, families need to prepare heirs psychologically to manage wealth. This is best done gradually, through two-way conversations that set expectations. And it pays to start the estate-planning process early, make updates and plan for emergencies. 

“People often ask me how long it will take to put an estate plan together,” Ray told Retirement Upside. “That’s not the right way to look at it. It’s an ongoing process.”

That’s a Bit Awkward 

Any number of topics can make planning feel awkward or downright uncomfortable. Ray recently wrote an analysis about wealthy parents discussing prenuptial agreements with their heirs, for example. Parents want to celebrate their children’s joy and welcome a new person into the family, of course, but they may wonder what a marriage means for the family’s finances, especially in cases where the heir is expected to take over a valuable family business or inherit a very large amount of money.  

“No one plans on watching their home go up in flames, yet we carry homeowners’ insurance,” Ray wrote. “You can position a prenuptial agreement as a type of marriage insurance. It’s not a prediction of failure. It’s more a layer of protection in case things go wrong.”

For families with businesses or significant assets, simply deciding who inherits what may not be enough, said Sean Houghton, director of personal trust services at New Hampshire Shores Trust. In these situations, an effective estate plan: 

• Helps distinguish beneficial ownership from decision-making authority, while establishing clear fiduciary roles and addressing what happens when a family member’s professional role changes or ends. 
• Creates mechanisms for resolving conflicts before they threaten the assets or family relationships.

Financial advisors can show their value by initiating and normalizing such discussions, Houghton said. The same is true when it comes to parents discussing inheritances with their children, some of whom may be better suited for receiving wealth directly, while others may require more structure and support. 

No ‘Trust Reveal’ Parties. Another idea for advisors to bring to the table is dispelling the idea of a “trust reveal” meeting, where heirs learn for the first time what they will (or won’t) inherit. Such scenes make for great television because they dramatize a highly private and vulnerable moment for a family. In real life, a surprise inheritance meeting more often signals that important conversations were postponed for too long.