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Legacy planning

Communication is critical to be successful

In a study by researchers Roy Williams and Vic Preisser, 3,200 families who suffered a failed wealth transfer were asked what they thought was the primary factor contributing to their loss of wealth. Over 60 percent of the families pointed to a lack of communication and trust, and 25 percent blamed unprepared heirs for their failures. Only three percent faulted poor financial planning or investments. 

For these unfortunate families, hindsight is 20/20. While it’s often possible to use hindsight to change an outcome, there is rarely a second chance for transitioning families. 

Establishing trust through clear and honest communication doesn’t happen overnight; it requires a structured approach, shared leadership, and accountability to the process – a daunting endeavor for any family. Families intent on steering a course for success will make strict adherence to this principle their top priority, going to the extent of hiring a trained facilitator to help cement it into the family structure.

Preparing your heirs

With a solid estate plan, you prepare for the smooth transition of your assets to your heirs. But are your heirs prepared to receive and manage them? How do you overcome the mistrust and miscommunication that often plagues families? Can you trust their decisions on how to manage the money?

Of course, you can’t be there to control your heirs’ decision-making, which can lead to problems if they don’t have your guidance. While your estate plan may be clear on how your assets are distributed, more is needed to communicate your vision and goals for your legacy. 

Starting the conversation

Leaving a legacy is about more than transferring assets. It’s also about transferring your family values and attitude about money. To ensure your heirs are aligned with your vision, you need to have a conversation with them—not just one but several. It might be uncomfortable for some at first, but once your children grasp the significance of their roles and responsibilities in managing your legacy, it becomes a family enterprise. 

Here’s how to prepare for the conversation:

Decide on what to tell them

Ultimately, your children should know everything about your estate plan. However, you should be more selective about what you tell them if they are younger. First, it would be essential to help them understand what happens to your estate when you die. Before discussing the financial details with them, take the opportunity to share your money principles and values and why they’re essential. The key is to help them understand it’s not just about the money. 

Together or separate

Do you have one-on-one conversations or gather your children for a group chat? Depending on your circumstances, it could be a combination of both, particularly if your plan treats any children differently. 

Ask for their input

Some clients may choose to allow their children to have input into the estate planning process; others do not.  Before unveiling your estate plan, you need to decide how and whether to ask them for their input. Ultimately, your estate plan is your document – and it should reflect your wishes, values, and goals, not anyone else’s objectives.  It is important, however, that you explain those wishes, values and goals, and as you do so, check in on their feelings. Addressing any concerns, they may have now can be helpful in avoiding future misunderstandings and problems.  

Prepare your executor or trustee

Naming your executor or trustee is important.  If you have an older child you plan to name as the executor or trustee, you should meet separately to review the estate plan and their role in executing it. If you have multiple children, be aware that naming one child as fiduciary can sometimes result in family disharmony.  Corporate fiduciaries such as Alpine Bank Wealth Management can help in this situation; contact us if you would like more information on these services.  No matter who you name as fiduciary, it is a good idea to meet with them and to share your vision about the role money plays in your legacy. If you are creating trusts for your beneficiaries, you may also wish to consider asking your estate planning attorney to add certain language in your documents, such as purpose clauses or guidelines for your trustee.  You may also wish to involve your estate attorney in the meeting with your fiduciary. 

Did you know Alpine Bank has a wealth management division? Learn more about our team here.

Products of our Wealth Management service are not FDIC insured, may lose value and are not bank guaranteed.

About This Author


Alpine Bank Staff

Alpine Bank is an independent, employee-owned organization with headquarters in Glenwood Springs and banking offices across Colorado’s Western Slope, mountains and Front Range.

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