Is Secrecy Wise in Estate Planning?

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Secrecy is not the best policy when it comes to estate planning.

Secrets are generally considered problematic for relationships.

Exceptions include surprise parties and confidentiality within a therapeutic relationship or the attorney-client privilege.

Typically, estate planning is not one of these exceptions.

According to a recent Financial Advisor article titled “Family Wealth Transfers Undermined by Secrecy,” it is often best for families to know estate planning details.

Secrecy is not good for estate planning.
Secrecy can complicate estate planning and execution.

Unfortunately, a recent survey by a financial services research firm found only half of those creating an estate plan share their wishes with their loved ones before they die.

The survey included two demographics.

The first demographic included affluent investors with more than $250,000 in investable assets.

The second demographic included investors under age 45 with earnings exceeding $125,000.

The financial services research firm weighed responses to reflect household distributions.

Generally, these demographics are older and wealthier than the average American.

Some family dynamics mean those engaged in estate planning are more hesitant to discuss financial details.

Often family money is veiled in secrecy.

The survey asked about the extent to which heirs were aware of the estate planning wishes and plans of their parents.

Just 26 percent indicated the heirs were very well informed.

As wealth increased, the chances of having conversations also increased.

Nearly a third of survey participants with more than $1 million in investable assets indicated they had told their heirs about their plans.

In contrast, those with fewer than $250,000 were either unsure or knew their heirs were clueless about their plans.

Whether you plan to leave assets directly to your children or skip a generation for tax benefits, you must have a comprehensive estate plan.

Communication is key in wealth transfer planning.

Unfortunately, one-quarter of survey participants had no intent to provide information to heirs about their assets prior to their deaths.


This secrecy can cripple wealth transfer planning.

Openness about what assets exist and what needs to be done provides a smoother transition.

Secrecy can also prove problematic in the event of incapacity.

Incapacity planning involves power of attorney documents, advance directives, and healthcare power of attorney documents.

These must be shared with loved ones so action can be taken to manage medical and financial concerns if the maker of the documents becomes incapacitated.

With no plan in place or no knowledge of existing plans, loved ones can experience unnecessary stress and strain emotionally and financially.

Another important part of planning for wealth transfer and preservation involves addressing healthcare and long-term care costs in your estate planning.

Secrecy around long-term care planning can lead to assets being drained far faster than necessary.

Work with an experienced estate planning attorney to help you create a wealth transfer plan and communicate it to your loved ones.

Reference: Financial Advisor (Feb. 22, 2023) “Family Wealth Transfers Undermined by Secrecy”

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