Discussing Inheritance with Adult Children: A Practical Guide

Talking about inheritance can be a challenging yet necessary conversation for families. For many, the topic is fraught with emotional, financial, and interpersonal complexities. However, having an open and practical dialogue about inheritance with adult children is crucial for minimizing misunderstandings, reducing family disputes, and ensuring that your wishes are respected.

This guide provides actionable steps and strategies to navigate these discussions effectively and sensitively.

Why Discuss Inheritance?

1. Clarify Intentions: Ensure your children understand your wishes regarding the distribution of assets.
2. Prevent Misunderstandings: Open communication reduces the likelihood of confusion or disputes.
3. Prepare Your Children: Help them plan for their financial futures.
4. Foster Family Harmony: Addressing concerns and expectations openly can prevent conflicts.
5. Honor Your Legacy: Use the discussion to share your values and intentions behind your decisions.

Preparing for the Conversation

1. Clarify Your Goals

Before initiating the discussion, consider what you want to achieve:

• Do you want to explain your decisions?
• Are you seeking input from your children?
• Do you want to focus on broader family values or specific financial details?

Having a clear purpose will help guide the conversation.

2. Review Your Estate Plan

Ensure that your estate plan is up to date and reflects your current wishes. Key documents to review include:

• Your will.
• Trust agreements.
• Beneficiary designations.
• Advance directives and powers of attorney.

Work with an estate planning attorney or financial advisor to address any gaps or inconsistencies.

3. Anticipate Emotional Reactions

Inheritance discussions can evoke a range of emotions, including gratitude, disappointment, or even resentment. Be prepared to address these feelings with empathy and patience.

4. Choose the Right Setting

Select a time and place where everyone can focus without distractions. A comfortable, neutral environment fosters open communication.

Structuring the Conversation

1. Set a Positive Tone

Begin the discussion by emphasizing its importance and your desire to ensure fairness, clarity, and family unity. For example:

“I want to have this conversation because I value our family’s harmony and want to make sure everyone understands my wishes.”

2. Share Your Values

Frame the conversation around your values and priorities, such as:

• Providing financial security for your children.
• Supporting causes or charities meaningful to you.
• Preserving family traditions or assets.

This context can help your children appreciate the reasoning behind your decisions.

3. Discuss Specifics

While the level of detail you provide is up to you, consider addressing the following:

• Asset Distribution: Explain how your assets will be divided and why. For example, if certain children will inherit specific properties or heirlooms, clarify the reasons.
• Trusts and Conditions: If you’ve set up trusts or attached conditions to inheritances, explain how these work and their purpose.
• Charitable Giving: Share your intentions for donations to charities or organizations.
• Roles and Responsibilities: Outline who will serve as executors, trustees, or powers of attorney, and why they were chosen.

4. Encourage Questions and Feedback

Invite your children to ask questions or share their thoughts. Addressing concerns in the moment can prevent misunderstandings later.

5. Stay Flexible

While you may have made firm decisions, be open to considering your children’s perspectives. For example, they may have insights about sentimental items or financial needs you hadn’t considered.

Addressing Common Challenges

1. Sibling Rivalry

Unequal inheritance distributions can create tension among siblings. To address this:

• Be transparent about your reasoning.
• Emphasize fairness based on needs or contributions.
• Consider using trusts or other tools to equalize distributions over time.

2. Sensitive Topics

Some aspects of inheritance may be emotionally charged, such as:

• Dividing family heirlooms.
• Addressing debt or financial irresponsibility.
• Providing for blended families or stepchildren.

Approach these topics with sensitivity and ensure everyone feels heard.

3. Managing Expectations

If your children have unrealistic expectations about their inheritance, address these gently but firmly. For example:

“While I want to support you, my primary goal is to ensure that my wishes are fulfilled and that everyone is treated fairly.”

Leveraging Professional Support

Consider involving professionals to provide guidance and impartiality:

• Estate Planning Attorney: Explains legal aspects of your plan and ensures compliance with laws.
• Financial Advisor: Offers insights on the financial implications of your plan.
• Mediator: Facilitates discussions if family dynamics are particularly complex.

Follow-Up Actions

1. Document the Conversation

Summarize the key points discussed and share them with your children to ensure everyone is on the same page.

2. Update Your Estate Plan

If the conversation leads to changes in your wishes, work with your attorney to revise your estate plan accordingly.

3. Maintain Open Communication

Inheritance discussions are not a one-time event. Regularly revisit the topic as circumstances or laws change.

Case Study: Balancing Fairness and Transparency

Scenario: Eleanor, a widow in Alberta, has three adult children. Her estate includes a family cottage, investment accounts, and a charitable foundation. She wants to ensure her children feel valued while honoring her commitment to philanthropy.

Solution:

1. Host a Meeting: Eleanor gathers her children for an open discussion.
2. Explain Decisions: She explains that the family cottage will go to her eldest child, who has invested significant time in its upkeep. The remaining assets will be divided equally among all three children.
3. Address Philanthropy: Eleanor shares her plan to allocate 20% of her estate to the foundation and explains why this aligns with her values.
4. Invite Feedback: Her children express concerns about the cottage’s upkeep. Eleanor agrees to set up a maintenance fund to address this issue.

Outcome: Eleanor’s transparency and willingness to adapt ensure her children feel respected and unified.

Tips for a Productive Conversation

1. Start Early: Don’t wait for a crisis to initiate the discussion.
2. Focus on Values: Emphasize the importance of family harmony and shared goals.
3. Be Patient: Allow time for emotions to settle and for everyone to process the information.
4. Seek Help if Needed: Involve professionals to mediate or clarify complex issues.

Common Mistakes to Avoid

1. Delaying the Conversation: Procrastinating can lead to confusion and disputes later.
2. Being Vague: Lack of clarity can create misunderstandings.
3. Ignoring Emotional Impact: Dismissing feelings can strain relationships.
4. Excluding Key People: Ensure all relevant family members are involved in the discussion.

Resources for Inheritance Planning

• Canadian Bar Association: Guidance on estate planning and legal resources.
• Financial Consumer Agency of Canada: Tools for financial planning.
• Family Enterprise Canada: Support for family wealth and succession planning.

Discussing inheritance with adult children is a crucial step in creating a harmonious and well-informed family dynamic. By approaching the conversation with clarity, empathy, and professionalism, you can ensure your wishes are understood and respected. Start the dialogue early, involve your children in the process, and revisit the discussion as needed to adapt to changing circumstances. With thoughtful planning and open communication, you can leave a legacy that reflects your values and strengthens family bonds.