The Estate Planning Gift To Give Your Millennial Children In 2019
Boomers have been building legacies from the moment they were born. From the innocent days of the 1950s to the social changes of the 1960s to the excesses of the 1980s, this generation has made its impact known.
As Previously Published On Forbes.com
Now as Boomers enter their 60s and 70s, they are more focused than ever before on managing their family legacies. The 2018 U.S. Trust Insights on Wealth and Worth Study found that 67% of individuals over age 50 want to use their wealth to invest in their children and grandchildren. Further, many are doing more for their children than their own parents did for them. Boomers who have managed their finances in an organized manner want to be sure that their intent and hard work doesn’t go to waste.
The challenge, however, is that Boomers cannot control all aspects of their financial lives. One area that they often grouse about to their estate attorney, CPA or financial planner is that their children aren’t doing the things that they ask them to. One thing driving Boomers crazy is their children’s estate planning – or lack thereof.
“Most Gen Xers and Millennials, when asked by their parents, do not have their financial affairs and estate planning affairs arranged in a manner sufficient to satisfy senior generations,” says Christopher Burns, attorney and Chair of the Estate Planning Group at Henson Efron, PA in Minneapolis, Minnesota.
For the Gen X and Millennial generations, estate planning might be the last thing on their mind. Overwhelmed by debt and trying to get their day to day financial lives on the right path, the nagging of their parents might make them resistant to following their advice.
There’s one thing Boomers can do to ensure their children do the right thing when it comes to estate planning: they can make a gift of estate planning to their adult child.
Long Established Family Patterns Are Challenging
But before Boomers start handing out gift certificates for their estate planning attorney, they need to consider several issues in order to put their family on the path to success. Family dynamics are a challenge, even in the best of times. In reviewing a family’s structure, what is most striking is that each member’s role has been set early on. Further, family patterns are often hard to break.
“There is an implied understanding in a family system on everything from the role we each play to how we do or don’t communicate with one another to how we are seen and perceived,” explains Katherine Dean, Head of Family Dynamics, a national practice at Wells Fargo Private Bank. “It can be very challenging as children grow up to become adults to shift these patterns in order to work together differently.”
Parents who want to offer to pay for an adult child’s estate plan should consider how best to broach the topic. The wrong approach could trigger an unintended family drama. Timing is important for these discussions.
“The most effective way [to give an estate plan as a gift] tends to be when the [child] has a child of their own to raise,” explains Burns. “Still others use a family event, such as a death in the family as a way to motivate their children to get their affairs in order.”
A Strategic Approach
But the help of a trusted advisor can also smooth the path for a successful approach. A third party can often frame the process for all the generations to feel that they have a voice. This can be done with a family meeting where certain ground rules are laid out.
Dean emphasizes that the right context and communication is key to having Boomers pay for their children’s estate plans. She recalls one family’s unsuccessful foray into estate planning with their three young adult children and their spouses.
“There was no context set before the meeting, it did not go well. Instead, feelings were hurt,” she explains. “Often the reason is that the children feel they are not given a voice in advance of the meeting or discussion. The meeting is seen as ‘mom and dad’s agenda’.”
Her advice for Boomers making this type of gift is quite simple: these conversations need to be more intentional in the why and the how.
Establish Clear Boundaries
Further, Boomers must respect boundaries once the estate plan is completed. They may have paid for the estate plan, but that does not mean they are entitled to see the child’s documents. The burden of enforcing this boundary often falls to the estate attorney.
“I address this issue in advance by letting the senior generation know that I cannot share the child’s documents with them; it is up to the child to do so or specifically authorize me to do so,” explains Burns. “Addressing this up front has made it so that it has never been a problem.”
Communication, Context and a Great Gift
The best gift a parent can give their child for 2019 is to help them organize and manage their affairs. By offering to pay for an estate plan, Boomers can take the right steps to ensure that their legacies will continue after they are gone.
And Boomers shouldn’t worry that this gift will not be used. Burns sums it up well when he says, “I cannot recall a single time when a parent has offered to pay for a child’s estate plan, that the child has failed to complete it.”