By Aaron S. Nuti
Upon the passing of a loved one most people tend to be F.I.N.E. By Aerosmith’s definition this means Fouled Up, Insecure, Neurotic, and Emotional, so any steps you take ahead of time can help with what is already an emotional and stressful situation. When people hear pre-planning, they think about making and paying for funeral arrangements prior to death, but that is only a small part of what pre-planning entails. While making arrangements ahead of time is important, there are other issues that should be addressed as part of pre-planning as well. Here are several things to consider as part of your pre-planning process outside of funeral arrangements.
Start Earlier Than You Think
Seventy years of age is recommended for starting the pre-planning process, if not earlier. Seventies are considered the last lucid decade and it makes sense to start the process while there is clarity and health. Once people are in their advanced years and a health crisis occurs, it tends to become all-encompassing and time consuming. There tends to be little time for anything else after the health crisis, so be sure you are addressing items earlier than you may think.
Don’t Assume
If you’ve ever witnessed a family fighting over money after the death of a loved one, this may be one of the reasons why. Many people assume that their heirs know what their wishes are, but never communicate those wishes while they are alive. If you don’t share your wishes, then the next generation will make their own assumptions and each member of the next gen may have different assumptions. Be sure to share your wishes, so there is clarity amongst your heirs.
Have a Family Meeting
Many people think that family meetings have to include conversations about money, but that is not true. In many instances the older generation does not want to share specifics, as they don’t know if that much will be left; however, the next generation doesn’t approach it in the correct way either by asking what they have, which causes the misunderstanding. The next generation wants to know if their parents are going to be okay. So, one of the main goals of the family meeting should be letting them know that you are going to be okay. Also, it should be an opportunity to tell the next generation who they should go to when the transfer of wealth occurs and where information is located.
The goal of the family meeting simply is to provide clarity, improve communication, and reduce stress across the generations. Something as simple as knowing that there is a documented list of the valuables and where to go to get it, at the time of transfer can be all it takes.
Aaron S. Nuti, CFA, CFP®, CAIA is an investment adviser with over 15 years of experience with Fairport Wealth of Cleveland, Ohio. Aaron works with emerging affluent and high net worth families providing holistic wealth management services including risk management, tax, estate and investment planning.
