Six Step Strategy for Leaving an Inheritance- Step 6
by Mike Jette on Apr 24, 2018
Step Six: The Talk Decision
An inheritance can be a profound blessing or an unintended curse. The determining factor can be found in the preparation of those who will be the recipients. A critical component of their preparation is communication and the final step in the Six Step Strategy is The Talk Decision.
The key principle in deciding how and when to communicate your intentions with your heirs is to avoid creating a coping gap for them. A coping gap is the difference between their expectations and your reality. Effective execution of this step prepares a beneficiary to receive the wealth and helps prevent surprises caused by your decisions.
It takes time and intention to make sure a beneficiary’s expectations line up with the reality of your decisions. One tool some are using with great success is the Family Conference. The goal of the Family Conference is to communicate your intentions to the next generation, or even to be a venue for a formal transfer of stewardship. A Family Conference can promote family harmony, it can help to train the next generation, and it can help avoid the creation of a coping gap. It helps to make sure that all are on the same page as it pertains to your wealth transfer decisions.
In summary, the goal of The Talk Decision is to align an heir’s expectation with your reality. A Family Conference can be an effective tool toward that end.
How prepared is your family to receive their inheritance?
I wrote in the beginning this Six Step Strategy for Leaving an Inheritance is ultimately about relationships. Most relationships are 'messy' … meaning they are complicated because of past conflict, differences in perceptions and expectations. My hope is you have benefited from the content, principles and questions and feel better equipped to tackle the process and prepare the next steward(s) of all you’ve been given. Let me know if we can help you.
I’m ending this series with a brief summary of the key points:
- The Transfer Decision - primarily answers the ‘who’ of the wealth transfer process and the three questions and three principles help to build the foundation for the next 5 steps.
- The Treatment Decision - is your opportunity to explore what you want to transfer to each beneficiary and why.
- The Timing Decision- considers the timing for making inheritance gifts. One helpful step in making this decision is to set a finish line or, said another way, defining what financial freedom looks like for you so that you can 'do your givin' while you're livin'!
- The Titling Decision - your confidence in the outcome of this process hinges on the clarity of your goals and whether the next steward has been prepared and equipped. This is best accomplished prior to your death.
- The Tools Decision - like a recipe these steps should be followed in order. Estate planning tools and techniques help accomplish your objective … but are not the objective. Keep it simple and seek professional advice.
- The Talk Decision - the goal of The Talk Decision is to align an heir’s expectation with your reality. A Family Conference can be an effective tool toward that end.
For those who might like to take a 'deeper dive' on this topic, I have a few copies of Ron Blue's book "Splitting Heirs: Giving Your Money and Things to Your Children Without Ruining Their Lives" to give away. Just get in touch and we will try to put one in your hands!