Estate planning is key to securing our family’s well-being and wealth now and for generations to come, but the vast majority of Black people (“nearly 70%”) don’t have a plan in place. That’s why we’ve partnered with Trust & Will, an affordable online estate planning company. Get 10% off their services by using offer code MATERMEA.
When I was around 8 or 9 years old, my dad told me that when he died, I would be on my own financially. There would be no will or trust fund to soften that official landing into adulthood.
What prompted that reveal has been lost to the ether of time and repressed memories. But I think about it often.
If you’ve received a similar talking to growing up, it most likely came from a place of love. Our parents or guardians wanted to make sure we were prepared to take care of ourselves. Maybe it was a form of insurance—a way to make sure we knew things weren’t easy for them, but they wanted it to be easier for us.
That said, while I got the why of the lesson, my dad didn’t give me the how. How could I create the kind of wealth that would be able to take care of myself and my future family? How could I be in a position to pass something on to them?
He couldn’t pass that information along to me because he didn’t know himself at the time. But thanks to conversations about generational wealth and support from digital estate planning companies like Trust & Will, we can pass on those lessons to our children.
Should Kids Learn About Estate Planning?
The short answer is yes. Talking to your children about estate planning has a two-fold mission: to inform and empower.
If you’ve gone through all the effort of creating an estate plan, your beneficiaries should know about it.
“It’s better to have these conversations early on so that there aren’t shocking surprises in the future,” says Patrick Hicks, head of legal at Trust & Will.
“There is a risk of children being unaware or without access to funds if parents should pass away or become incapacitated unexpectedly.”
Also, estate planning is a vital part of financial education for kids that shouldn’t be overlooked. Talking to them about what goes into building generational wealth and financial security and passing it down to future generations creates a solid foundation they can replicate and build on once they’re older.
What Should I Tell My Kids About Estate Planning?
We already know that talking about estate planning with your parents can be difficult.
One could argue that what we’re talking about here is even harder. Talking to kids about estate planning requires acknowledging the unthinkable: That you’re not invincible and that one day you won’t be here to protect them.
But just because the topic is a difficult one doesn’t mean it shouldn’t be had at all, or held off on until they’re older, says Patrick of Trust & Will.
“How you go about having the conversation depends on the child’s age and maturity level,” Patrick says.
The following are a few things you can share with your children about estate planning. Providing them with the basics is valuable, as is modeling this kind of financial planning. It helps instill in them the knowledge that they are being looked after and that they can look after themselves when the time comes.
1. Guardianship Plan
Not sure where to start when it comes to talking to your kids about estate planning?
“For very young children, it might be as simple as gently letting them know who will be there to take care of them if anything should happen to you,” Patrick says.
Tell them that a guardianship plan lets you appoint legal guardians for your loved ones. (Your kids may be happy to know that includes family pets).
As they get older, let them know that these plans can apply to children, elders, and other dependents and can provide instructions for medical care, purchases, and much more.
2. Estate Plan
“As children get older,” Patrick advises, “you might feel that it’s appropriate to make them aware that you have created a plan that they will be taken care of if anything happens.”
Although these conversations can be difficult, transparency and open communication are key.
You can give them an overview of what estate planning is. Explain that an estate is a person’s net worth, and encompasses all of their possessions—land, money, investments, and more. An estate plan lets people know what they’d like to happen to their estate should they not be able to themselves.
3. Trusts and Wills
When kids are in middle school or high school, Patrick suggests explaining to them what trusts, assets, and wills are.
Trusts allow a beneficiary—that is someone who is named to receive a benefit—to access and direct funds that have been placed inside of it. Investments, money, and property can all be placed inside a trust.
A will is a legal document that lets people tell their loved ones what their final wishes are. It can explain how you’d like your assets to be distributed and more.
4. Living Wills
“Keep in mind that a parent has legal rights for a child until that child turns 18,” says Patrick of Trust & Will. “So it’s equally important that millennial parents talk about their own estate plans with their children, but also that they encourage and help their own children set up personal estate plans when they turn 18.”
This can be one of the first acts of “adulting” your child will do.
Estate planning attorney Lori Anne Douglass shared with us the three things parents can help their children set up once they turn 18. “a health-care proxy that appoints somebody to make your medical decisions if you can’t make them; a living will that address whether you want to be removed from artificial life support if that life support is only going to prolong your natural death; and a general power of attorney that allows somebody to make your financial decisions if you can’t make them.”
Helping your child set up their own estate plan is a way to establish your relationship with them should they need you when they’re out of the nest.
“If something happens to your 18 year old at college,” Lori Anne explained, “you cannot get any information about your child’s medical records or go to your child’s bank account or do anything—privacy laws prevent it.”
5. Work With a Professional
While there are some things you’ll want your kids to know they can do on their own, estate planning isn’t one of them.
Working with an estate planning company like Trust & Will can help alleviate some of the stress and unnecessary taxation, confusion, and grief that come with taking a DIY approach to estate planning. It also models what proper financial planning and care looks like.
By talking about estate planning and finances with your children, you’re taking a step toward financial freedom and generational wealth building.
“Although these conversations can be difficult, transparency and open communication are key,” says Patrick. “If anything your children will later appreciate that you were proactive about planning for their future security and that you shared this information with them.
“You’re also setting a good example for them by banishing the stigma of speaking openly about finances and family planning.”
Do you have additional questions about creating an estate plan for your family? You can connect with someone from Trust & Will here—use the offer code MATERMEA to get 10% off any estate plan at checkout.