How To Navigate Family Dynamics When Choosing Executors and Beneficiaries

It’s arduous to think about how your passing will impact loved ones. 

And while mourning the loss of a family member is tough enough, family dynamics regarding your estate and legacy can make it even more complex.

While you’re still in good health with many exciting years ahead, now’s an ideal time to consider how you want to handle your final wishes, especially with delicate family relationships. 

You’ll want to ask questions such as:

• Who can execute my estate plan? 

• Which family members shouldn’t be beneficiaries?

• Who do I trust to carry all of this out?

As you make these considerations, Legacy Wealth can help. Below we’ve identified a few ways you can navigate through these challenging estate planning decisions.

1. Identify The Roles You Need To Fill

Your estate plan doesn’t occur in a vacuum, and your documents can’t just speak for themselves. Several surviving loved ones play critical roles in executing your estate plan. 

The people you choose should be trustworthy, responsible, and able to make decisions in your estate’s best interest.

Common roles you’ll want to fill include:

Executor

Your estate’s executor will work directly with your team of financial professionals to manage and settle your financial obligations after your death or incapacitation. 

Specific tasks could include filing a tax return for your estate, paying bills, and dividing personal property. This person will help distribute your estate’s assets to the appropriate parties and provide any required legal notices of your passing, like insurance companies, banks, and other institutions.

Durable Power of Attorney

A power of attorney is a legal document that allows someone to make decisions on your behalf in the event of incapacitation. This person can manage your money on your behalf, meaning they’re able to make financial decisions like selling a home, depositing money, paying bills, etc. 

Once you pass away, a power of attorney document is no longer valid, and an executor becomes in charge of your affairs.

Healthcare Power of Attorney

Like what we described above, a healthcare power of attorney can make medical decisions on your behalf. This person can step in to manage your day-to-day care, and they can be called upon for life or death decisions.

Trustee and Conservator

If you have a trust, you need someone in charge of managing the assets inside the trust, aka a trustee. In addition to managing the assets and making financial decisions, like hiring an advisor, this person also heads distributing the assets based on the trusts’ terms. 

Do you have minor children? If so, you’ll want to name a conservator in your will. A conservator handles the financial affairs for your child, such as trust assets, paying for school, taxes, and other expenses. 

Guardian

If you’re the physical caretaker of a minor or adult with special needs, you’ll need to identify someone who can take your place when necessary. A guardian would take care of your child after your passing, and they will have complete control over where the child lives, goes to school, etc.

Beneficiary

Your beneficiaries are the people or institutions receiving assets from your estate or trust after your passing. Select your beneficiaries carefully as they play a significant role in the wealth transfer process. More often than not, official beneficiary designations supersede what’s in your will, so it’s critical everything remains up to date to avoid tension and arguments. 

2. Consider Your Legacy

While estate planning can feel messy and overwhelming, there’s something you can do to help ground your emotions during the process.

Focus on your legacy.

A legacy isn’t only something you leave behind; it’s something you live by that drives your actions, motivations, and core values. Think about what those values are and how you want to see them reflected in your legacy. 

Ask yourself,

• What does your legacy mean to you?
• How can you intentionally infuse your estate plan with your goals and values (directing some money to charity, setting up a fund for your grandkid’s education, paying off your child’s debt, etc.)?
• In what ways do you live out your legacy goals every day?

Remember, your values should be the driving force behind your estate planning efforts. While family dynamics can be awkward, focusing on your legacy puts the decisions you’re making now into a clearer perspective.

3. Communicate With Key Players

Before speaking with anyone in your family about your plans, have a clear sense of who you want (and don’t want) to include in your will. Making your mind up before speaking to others can help you stay firm, especially if you’re worried others may try to persuade or bully you into changing your mind.

Once you’ve made a decision, communicate with your “key players” first. These will be the people who have roles like executor, guardian, and power of attorney. 

Make sure they’re comfortable taking on this responsibility by reviewing the role in-depth with each person. They should know how their role will work within your greater estate plan. Getting this person (or people) comfortable first is essential before moving on to managing more complex family dynamics.

Next, communicate your wishes with your immediate family and/or closest friends, typically a spouse and children. These are likely the people who your passing will most impact, and keeping them well-informed of your plans now can help make the transfer process smoother when the time comes.

4. Keep Potential Conflicts in Mind

There are plenty of reasons why a relative or friend may be unhappy with your decisions. You may be leaving an estranged child out of your will, or someone is unhappy with how much of your estate is going to charity. 

It’s hard to please everyone, but the only person who needs to be comfortable with your plan is you.

If this sounds like a problem you’re likely to encounter, you need to decide if you should put your estate planning decisions out in the open now or wait for others to find out after your passing?

While the decision is up to you, typically communicating your wishes to immediate family and your estate planning attorney is enough. Most prefer to avoid opening a can of worms before they have to.

At the end of the day, remember that this is your estate plan. If a child or relatives feels frustrated by their decisions, it’s important to remember that they aren’t their decisions to make.

5. Work With a Solid Professional Team

Estate planning is complicated, and you want to make sure you’ve covered all your bases. We recommend building a team of financial professionals who can help develop and execute your estate plan.

At Legacy Wealth, we can provide these valuable professional connections—advisor, estate planning attorney, tax professionals, and more—to help create a more seamless transition process when the time comes. 

To learn more about our extensive experience in estate planning, schedule time to talk with our team soon.

Disclosure:

Advisory services are offered through Legacy Wealth Advisors, LLC dba Legacy Wealth Advisors, an Investment Advisor in the State of Michigan.

The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Michigan or where otherwise legally permitted. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication or future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Legacy Wealth Advisors does not offer tax planning or legal services but may provide references to tax services or legal providers. Legacy Wealth Advisors may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters.