RBC Retirement Strategies head Lee Anne Davies says while a lack of open communication and transparency during the estate planning process can result in resentment among family members, by communicating clearly in advance it is possible to determine the interests of the inheritors and build a will more effectively.DEBORAH BAIC
For the approximately 10 million Canadian boomers born between 1947 and 1964, reaching the second half of life often brings awareness of a painful, inevitable transition: the loss of beloved parents, and the passing of family assets onto the next generations.
But despite the inevitability of these events, essential conversations about the subject often don't occur, sometimes just because they're so uncomfortable to have.
While most people say they're willing to talk about the subject, "as you start getting into the specifics, you've ventured into a very scary topic," says Lee Anne Davies, head, Retirement Strategies, RBC. "There is no cookie cutter formula. It's about your family; your feelings, emotions and history. And it's about a future that includes uncertainty."
Without this critical communication, the intentions of both parents and adult children can be misinterpreted, sometimes creating resentment and discord among the remaining family members.
"The family cottage is often a big issue, because of the great memories associated with it," says Ms. Davies. "We sometimes hear parents say, 'I'll leave it for the kids to sort out.' That can leave them with all sorts of problems. Often one or two of the adult children will come forward after and say, 'I have no interest in the cottage.'"
By communicating clearly in advance, she says, it possible to determine the interests of the inheritors and then build the will more effectively.
No matter how detailed a will is, says Ms. Davies, there is a great deal that it doesn't communicate. "Our family structures are now much more complex, and although a will tells you who gets what in a black and white manner, it won't express why certain decisions were made."
Step-children may have more than two sets of grandparents, for example, and may be left out of a will in the interest of fairness -because the step-grandparents expect them to inherit from their biological grandparents - rather than exclusion. It's important, says Ms. Davies, for the parents of those step-children to understand why those decisions were made.
Transparency within the family is also critical to avoiding dissension, she says. "I know of one situation where there are two adult children: One of the sons asked the parents for information about their will and insurance because he wanted to be sure he can help should any issues arise. The other son has never asked - but that doesn't mean he isn't interested. Once the parents start to share information with one child, they need to share it with all the children."
According to Maureen Osis, co-author of Your Aging Parents, conversations about what will happen if an elderly parent in incapacitated can be equally challenging - and are equally important.
Her e-guide Decide for Yourself can be downloaded at Elderwise.ca, and includes many examples of the things that can go wrong when these essential conversations are neglected, as well as a comprehensive list of provincial resources.
When discussing sensitive issues such as financial information and personal health, it is helpful to remember that that everyone will be experiencing some uncertainty, anxiety, and stress due to changing circumstances and role relationships, says Ms. Osis. "You and your parents may have different values, opinions, and attitudes. Be sensitive to differing views, and recognize that not everyone will feel the same."
Patience is critical, as is thinking about the conversation as a process rather than an event, she says. "Some family members may need to talk and express feelings; others may need quiet time to process their own thoughts and feelings."
If the conversation becomes too difficult, says Ms. Davies, writing a letter may help. "Once everyone has time to digest the information and understand their parents' wishes, they often come together to make those things happen."
Pre-planning is the foundation of a successful outcome, she says. "Once you know when and where you're going to have the first conversation - and perhaps have even provided a bit of an agenda - you're off to a great start."
Set the stage for a healthy dialogue
Pre-planning difficult conversations about the transfer of family assets can ease discomfort and ensure a successful outcome, says Lee Anne Davies, head, Retirement Strategies, RBC.
"This isn't a one-shot deal where you sit down and resolve everything. The idea at first might be, 'We're just going to get your thoughts on a few things, but we're not going to draw any conclusions. Then we'll figure out what the next step is.'"
These are not conversations you want to have in a restaurant, she says. "Typically, the family home allows people to relax, to get up and have a drink or a snack when they feel the need. You don't want people to feel they're stuck in some formal structure."
Deciding who should be part of the conversations also requires forethought. While families often consist of adult children, spouses and partners of adult children and adult grandchildren, it's not always most helpful to include everyone. "You want some ground rules that are understood and respected at the outset about who will participate," she says.