As a financial literacy expert, I am a strong believer that financial and estate planning needs to happen throughout your life—and I do mean from Kindergarten onwards. The will is something most adults find too private and personal to talk about. Now, I really do not understand this. My friends are more willing to talk to their children about their own sex life than spelling out what happens in their will! The argument is always, “Why do they need to know?” or “They are too young” or “I don’t want to jinx it”.
You should engage your child in open discussions of your will in a stress-free way so they know what’s in it and how it works. If you are planning on leaving that vase to one child and not to the other, talk about it and let them know why you made up your mind this way. Children should also understand the mechanisms of wills and how hard you worked for the savings plan you are leaving them. This is important not only so that they safeguard their inheritance, but also so that they appreciate and grow it.
Why do kids need to know what is in your will?
Many families go through a lot of tension during the time of probating a will. It’s not unheard of that some families even stop talking to each other, tempers flaring up and relationships being broken. Almost all of this can be avoided by you taking the initiative to openly discuss the will through frank conversations of financial management early on. For example, If you have a child with special needs and are setting aside more for them, have that conversation openly so that rather than feeling unloved and left out, the remaining children have a sense of responsibility and care for their sibling.
Tips on when to talk to your child about a will and what to talk to them about.
From Kindergarten to Grade 6: First and foremost, children this age need to know that they will be ok. Letting them know that they don’t have to worry and that you have made sure they looked after if something happens to you, removes a lot of unnecessary stress. This is also a good time to tell them about the custody arrangements you have made. For example, “Don’t worry if something happens to mommy, Aunty Jane will always take care of you and you will stay with her”. It helps define the next in charge and enables that child to know that there is an approved person they can trust.
From Grades 7 - 12: This is when you start talking about why you made a will, how you earned the wealth you are leaving to them and also your vision of what they should do with that wealth that they are inheriting. Take this opportunity to teach your child about money, instill in them the values you think are important, It’s also a good time to introduce them to the lawyer so they are familiar with this person and the office. It also allows the lawyer to have a chance to make a positive impression on your child so that things are smoother when it’s time to exercise the will.
University aged kids: This is when you should really start telling your kids the contents of your will. If they are expecting to get the house and the jewelry, give them a concrete yes or explain the alternative plans. It is far better they know now than later. If any of them are executors of the will, this is the time when they learn exactly what needs to be done. Take your child to the lawyer and have them explain to your child the processes involved in probate and how your child will be impacted. Dealing with a parent’s will is a very stressful process and you need to familiarize your child with it as much as you can so that they know what the expectations are and what to do. If someone else is an executor, it is a good idea to have your children know who that is and what their role will be.
Late 20s onwards: It is time to walk them through the entire will. They need to get a grasp on not only who is getting what and understand your reason for it, but also appreciate the thought that went into it. If you are planning on using up all your wealth and not leaving them anything, tell them now. If you have specific requirements for end of life care, this is the time for them to know it. Depending on your relationship with them, this is the time for them to also meet your accountant, financial advisor and know where your major accounts are.
You always want your children to remember you well and appreciate your vision. Help them get started on the way by reducing the amount of stress involved in dealing with your assets.
Financial and estate planning is just one component of your financial management. Get yourself up to speed and your child ahead of the curb with our innovative financial literacy program, Camp Millionaire, which is a kid friendly after-school program or summer camp.