A guide to talking to your family about what’s in your will

Your child has just been baptized and your whole family is celebrating over a nice meal. The topic of guardianship versus godparenting comes up.

Your divorced parents start fighting over who’s taking responsibility for your child if you and your partner pass away. Your brother pipes in with, “I thought I was the godparent? Doesn’t that mean I get everything including the baby?” Your in-laws are nowhere to be found; they’re always late for important events — hence, they’re not chosen guardians or godparents to begin with.

Your partner starts crying at the thought of both of you dying.

You’re sinking lower and lower into your chair as your estranged sister gives you the stink eye because she’s clearly been cut out of any part of your estate plans.

“Listen, folks, how about we sort this all out in a family meeting, and we can walk you through our wills?” you say.

Insert puzzled — but happy — looks.

Family meetings bring clarity and reduce complexity when it comes to relationships, responsibilities and money before you die. Trust me, as tricky as they sound to navigate, not having one can make life for your loved ones very challenging.

Intrigued? This is the agenda I follow when hosting family financial meetings. I recommend having your first meeting the moment you acquire any assets or if you have a child. In other words, it’s basically never too early — just too late.

Item 1: The meaning of what’s in your will

This goes without saying (I think), but not having a will is a really bad financial decision. A will clearly defines what you want to have happen to your property, and your children, if you die. Without one, the court makes these decisions for you. In the process of making your will you’ll establish power of attorney (POA) and a health directive for your assets and health if you can’t make those kinds of decisions for yourself.

Sadly, stats show more than half of Canadians don’t have a will and, worse, 65 per cent of parents with young children don’t have one — where is the horror face emoji when you need one?

Don’t let this be you.

In your family meeting, take your loved ones through your will in detail. Share who you’ve chosen as executor(s) of the estate, as your POA(s), and as guardians of your children. Walk them through what you want done with the assets in your estate. Explain why you’ve made these decisions. I’ve found that offering a bit of meaning behind your estate plan, beyond it being designed to reduce taxes (that’s where financial planners are useful), helps eliminate any confusion about your wishes.

Item 2: Discuss where the heck everything is located

This is particularly important for your executor(s), who need to know where your accounts are located, where your insurance policies are filed, if there are medical action plans for your child that will need to be found and provided to the chosen guardians. I like the idea of rolling this all together in your net worth spreadsheet so that beside each asset and liability there is a branch location, account number and even a physical location in the house if it is a paper file. If there is a financial adviser involved and managing certain assets, put their name, email and phone number in this file. Your spreadsheet can be updated as your life changes, and shared only with the executor in confidence.

Item 3: Deal with the problems now

If there is confusion about terminology and meaning behind things like legal guardian vs. the spiritual guidance offered by a “godparent,” clear it up. If these roles are supposed to be one and the same, say it, and write it into your will. If there is concern about family assets moving to the new spouse of your mother for example, call that out. You don’t have to do what your family wants. But by clarifying your wishes, it will help to prevent unnecessary feuding down the road.

Item 4: Leave a bit of room for suggestions

Early inheritance. Selling properties. Gifting cottages. Planning for long-term care. Topping up RESPs. Life insurance policies. Charitable donations. Your family meeting might be full of opportunities to enrich the lives of family members, and your community, today rather than waiting until you die. Take these suggestions back to your financial planner to review and analyze the impacts.

Item 5: Plan to meet again

At least every three to five years it will make sense to update your will and estate plan. This is the perfect time to have another family meeting about your money plans. Recap the biggest changes since you last met, if any, and then run through this same agenda.

Chances are you can’t overcommunicate when it comes to family and money. Include the appropriate family members, and if it’s feeling a bit too complex or heated, bring in a money coach who’s got experience with family finances.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.