Talking to family members about estate planning and legacies can be difficult and even painful. Those discussions, however, will almost certainly be less painful in the long run than the stories children may make up after parents are gone about why they made the choices they did.
Should you tell the kids? When it comes to your estate plan, yes!
A Time article, titled "The Hardest Part of Making a Will: Telling Your Kids What’s in It" lists a few ideas to help you overcome the challenges of having these important conversations.
Here are the suggestions Time offers, as taken from the original article:
Communication. Think about your financial values in a larger context. Sometimes, estate plans will reflect lifelong values like charitable giving or the desire to provide for family first. If your children know your values, there is a good chance they will have an idea of what to expect from your estate.
Evaluate your children’s money skills. Children do not all have the same skills, knowledge, and attitudes about money. Children who will inherit large amounts of money need discussions about how to manage money and to be responsible.
Like one kid better? If you are not planning to treat all of your children “equally”—regardless of the reasons—you should share that information well in advance. Tell it privately to each child. You can have a lot of reasons to treat children differently in an estate plan; however, it is not a great idea to figure out the details when the will is probated. If you and your children can talk about the will's provisions and your reasoning for them ahead of time, there is less chance of conflict between siblings after the parents have passed. Do not allow your children to assume they are getting more than is really the case. If you do not tell them, you may avoid issues now, but there could be bigger troubles and resentment after your death.
Prepare your children for large or unexpected inheritances. Some individuals are shocked to get legacies much larger than expected from the lifestyles their parents led. An estate planning attorney may propose strategies that will help heirs learn more about both the financial and the emotional aspects of managing inherited wealth. An estate planning attorney may also suggest that parents look at options, such as giving more to the children during their lifetime, which would decrease the effect of a sudden inheritance.
Acknowledge those fears. Although they are not typically expressed, the biggest reason for not discussing estate plans with family members may be fear. Parents may think that their children will be angry or disappointed, or expect too much and be resentful of other heirs.
Communication is so important. It can ease some of the pain and anxiety in the decisions that parents make now and the aftermath when the will is probated. Working with an experienced estate planning attorney can also be a worthwhile investment toward achieving this goal.
Reference: Time (October 7, 2014) "The Hardest Part of Making a Will: Telling Your Kids What’s in It"