GENERATIONS MUST TALK TO EACH OTHER

Let's keep this brief and to the point. When there is an inheritance that is to pass from one generation to the next, it is IMPERATIVE that the two generations discuss the matter frankly. Failure to do so all too often results in feuds, broken families, lawsuits, unrealized dreams and all sorts of legal and tax expenses that might have been avoided. This doesn't apply to just millionaires. Middle class families with little more than a house, some life insurance and savings plans have as great a need to keep lines of communication open. Parents should keep mature children informed of the general nature and size of the inheritance. Specifics aren't always necessary. Mature children should inquire---diplomatically, of course---as to the estate planning efforts of the parents. It might help to have a third party initiate and/or intervene in the matter. A family lawyer. A bank trust officer. A credentialed financial advisor (who isn't selling anything). Even a family therapist, who might not be able to answer financial questions, but who, for starters, can pry open those lines of communication. Parents can gain peace of mind in knowing that their earned wealth will be treated as they wish. And children can benefit from learning how an inheritance can impact on their lives. Examples include as paying for their kids' college tuition, career moves, buying a home---or not. This is particularly critical over the next 2-3 years, as the federal estate tax laws might change drastically in 2010 or 2011. It will take time to get all the ducks in a row. Start NOW. We'll visit this important subject in more detail in the future. This is just a wake-up call. This article supplements Chapter 19, pages 568-572 of Personal Finance. Access the textbook by clicking on the red box in the right column.