Last week, I encouraged adult children to talk to their parents about their eventual inheritance.
It can feel like a selfish and cringy topic. But in my experience, it’s a topic parents are interested in as well because they tend to be very concerned about ensuring that their wealth passes on to their children.
The context I provided was minimizing the amount of inheritance that will go to the government in taxes. I suggested that your folks might not realize how much benefit can be achieved with the advice of an estate tax planning specialist. They would likely appreciate you sharing that information so they can act on it.
Another important context for a heart to heart about your inheritance is a blended family.
This one is trickier.
But like the tax issue, you and your parent likely share some common ground.
Your parent very likely wants to ensure that you end up receiving a fair share of their hard-earned wealth.
The “fair” part is one aspect that can get tricky. Nobody cares about being fair to the tax man! But your parent does want to be fair to their spouse and their spouse’s children.
You and your parent might have differing opinions about how your parent’s new spouse and their children should benefit from the wealth your parent brought into that relationship.
And your parent would want to include their spouse in those discussions.
I can’t point to a quote from a famous person on this, but I think it’s commonly understood that the trickier the conversation, the more important that it occur.
By having the discussion, you can ensure that your views and feelings are heard. You will also benefit from hearing your parent’s views and feelings. Whether or not your sense of fairness comes to an alignment, you will understand your parent’s decisions and not be left wondering after they’re gone.
That’s not the most important reason to have these discussions, though.
The most important reason is to ensure that the share of your parent’s wealth that they want you to receive, whatever that might happen to be, will actually go to you.
On this point, you and your parent are 100% aligned.
Your parent might not be aware that this is not a simple matter in the context of a blended family.
They might have a will that leaves everything to their spouse if they die first, with their spouse’s will dividing everything between their combined children when their spouse dies.
They might not know that this is a horrendously unreliable arrangement.
I should keep track of how many calls I get from disinherited stepchildren. There’s nothing stopping a stepparent from changing their will after the parent passes away.
Changing their will wouldn’t necessarily be about disrespecting their deceased spouse’s wishes.
They might have entered into a new relationship which comes with obligations to their new spouse and their new spouse’s children. Their relationship with their stepchildren might have faded or even soured over time.
The stepparent might have had the full intention of including their stepchild in their will while their spouse was alive. But all sorts of scenarios can come up that can change those intentions after their spouse passes away.
I’ve written a series of four columns that discuss why this arrangement is unreliable and offer more reliable solutions.
You can help your parent recognize this important issue. They may be just as motivated as you are to address it. Your stepparent might also share that motivation because they’re in the same boat if they were the one to die first.
Effective estate planning for a blended family will be more expensive than a simple will. Your frugal parent might not want to make that investment to secure your inheritance. If so, I suggest that it’s worth it for you to provide the necessary dollars.
If you have difficulty finding the columns I referred to, please reach out to me and I’ll help you.
Paul Hergott
You are encouraged to contact Paul directly at paul@hlaw.ca with legal questions and issues you would like him to write about.
