News Releases

CHICAGO, IL--(Marketwired - Jul 31, 2013) - The death of a loved one leads to a great deal of stress, but this anxiety can be exacerbated by a lack of understanding of the deceased's wishes regarding financial and personal assets. A new report released today from the BMO Wealth Institute urges family members to have detailed conversations about estate planning to alleviate unnecessary family quarrels in the future.

According to the report, The Family Conversation You Should Not Avoid: How to Discuss Your Legacy, while many American families are having conversations about estate planning and goals, these talks are often superficial. Studies show that almost 90 percent of adult children and parents agree that estate planning is an important topic to discuss, yet only 19 percent of adult children say that the discussions have been very detailed. Parents report that only one-third have had detailed discussions about their estate plan with their children. 

"Your personal legacy depends more on the effective communication of your values, plans and beliefs than on the items that can be neatly summarized in the paragraphs in your will and trust," said Stephen Williams, Vice President, U.S. Financial Planning Strategy, BMO Private Bank. "Though conversations about estate planning may be difficult, they are necessary to share the background and reasoning behind the estate decisions that have been made and that your heirs will have to implement."

Enhanced Estate Planning

Traditionally, estate planning has focused on estate administration, tax considerations and having the proper legal documents in place. But the new report states that enhanced estate planning is critical, as it eases the emotional impact on those left behind.

Enhanced estate planning encourages individuals to share stories about personal possessions and cherished assets so that family members understand the person's intentions, feelings and wishes. This avoids conflicts over the division of the financial assets and personal effects and encourages family unity. Enhanced estate planning can be especially important for blended and non-traditional families.

"Will your relatives and friends remember their period of loss as one when they were comforted and supported by each other, or will it be a divisive and difficult interpersonal experience?" asks Williams. "One of the best ways to create a legacy is through conversations with family, heirs and beneficiaries to foster lasting positive memories."

Starting the Conversation

Telling a child that a will, trust and power of attorney have been prepared, and even letting them know some of the plans for managing and distributing assets, would be considered an important discussion but not a detailed one. A detailed discussion addresses reasons for the decisions that were included in the preparation of the will and power of attorney.

"You and your heirs may not necessarily agree on everything, but the conversation will provide information to build a more robust e state plan with fewer potential surprises," said Williams. "In addition, it will help to create a legacy that safeguards your values and cherished memories long into the future."

BMO offers the following advice to help families develop an estate plan:

Meet as a family: Clearly identify the issues, avoid assumptions and expectations, hear the point of view of everyone involved, and spend time problem-solving.
Establish or update will and power of attorney: When changes are significant, the will may not provide for the distribution originally intended. Not only might assets no longer be available, but intended beneficiaries may have predeceased, new potential beneficiaries may have been born (such as grandchildren) or changes in family circumstances (like divorces) may not have been considered.
Get insured: Insurance provides a financial safety net for loved ones and can be used to replace earned income that is no longer provided. It also provides liquidity to pay off debts or pay for final expenses and taxes. Perform an estate liquidity analysis periodically.
Appoint an executor and trustee: Consider appointing a corporate executor to administer the estate, especially if there are concerns regarding the significant investment of time required and the high level of knowledge required to perform the role effectively, or if there are concerns about being at the center of family conflicts. Also, consider appointing a corporate trustee to administer assets held in or payable to a trust.

"Proactive planning and advice go hand in hand when it comes to effective estate planning," added Williams. "A financial professional can guide you through these important conversations to give you greater peace of mind."

About the BMO Wealth Institute
The BMO Wealth Institute provides insights an d strategies around wealth planning and financial decisions. The Institute's team of wealth planning professionals has deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.

BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location. Estate planning requires legal assistance which BMO Harris Bank N.A. and its affiliates do not provide. Please consult with your legal advisor.