How do I communicate with my family about my wealth transfer plans? (The Talk Decision)

Hello, my name is Ron Blue. One of the most important steps of the wealth transfer process is either at the beginning or at the end, and preferably in both places. That is called the expectation principle. I don’t want to create unrealistic expectations in my heirs, because if they have expectations that are different from reality, what I’ve done is created a coping gap. A coping gap is the difference between expectations and reality. So, if my expectations were “this” and the reality is “this,” I’ve got a coping gap.

One of the greatest gifts I can give to those that I’m leaving wealth to is to have the proper expectations on that. Now, you can do that, and most often it is done in family conferences. That conference does not have to be something formal. It can be around the dinner table at Christmas or Thanksgiving or on family vacation. But, you can talk about some of these issues, and let your heirs know what is reasonable in the way of expectations. It may be just principles; it does not have to be specific amounts. And certainly when you have young children, it would be inappropriate to do that. But, as they become adults, what you want to do is to see to the best of your ability, that they not have a coping gap after you’re dead, and are not even there and having the ability to explain it. So, create the proper expectation in your heirs.

Click here for the August 28, 2009 Blog Entry