January 12, 2006

Leave a will before your final leave

By Claire Mitchell

When I received information from an insurance company about inheritance planning, I was overwhelmed by the new thinking. Here is my attempt to synthesize data from the Allianz Life Insurance Co., which commissioned it and issued the statements on behalf of gerontologist-author Ken Dycht- wald, into terms that may be helpful to all in the Third Third.

Baby boomers thought their communication struggles with their parents' generation ended in the 1970s. But those struggles have resurfaced. This time the gap is about the transfer of $25 trillion in wealth to be handed down by the elder generation to their heirs, $7.2 trillion of which will go to the boomers. The elders are much more likely to believe they owe their children an inheritance.

MINORITY OF WILLS

The majority of the nation's boomers and elders surveyed say they feel highly confident discussing key elements of legacy planning issues, yet less than one-third of families have done so. Nonfinancial issues like ethics, morality and religion are 10 times more important than finances, both groups say.

''Many people wrongly assume the most important issue among families is money and wealth transfer -- it's not,'' Dychtwald said. ``For the overwhelming majority, legacy transfer has to do with deeper, more emotional issues. A true legacy also includes memories, ethics you teach your children over a lifetime.''

A true legacy is based on four pillars: values and life lessons; instructions and wishes to be fulfilled; personal possessions of emotional value; financial assets/real estate. If all four are not discussed in advance, at a nonstressful occasion, the conversation cannot be considered to be meaningful and effective.

This study is not only a call to action for all of us in the Third Third to create this important family conversation, but provides a helpful template for doing so.

The study further goes into the family's need to identify the Alpha child, the one whom parents turn to first.

This child typically guides legacy planning, is the one who keeps the family connected and is a strong communicator.

LEGACY AIDE

The ideal legacy advisor -- either the Alpha child or a professional -- whom both generations look for, is one who demonstrates honesty, explains things easily, is trustworthy, compassionate and is a good listener and a strong and clear communicator. Among those surveyed, it was found that the majority of those in the elder generation have made some plans for legacy transfer -- only 11 percent have not -- and 60 percent have sought professional assistance.

My own survey shows that 100 percent of those questioned will eventually go to the great beyond, whether or not they have made arrangements that are satisfactory to them. We might as well state our wishes outright. It feels good to have a will, a trust, if possible and verbal discussion with all our offspring.

If you can't talk to them as a group, talk with them individually, on the phone, with e-mail or any other method, but do it for your heirs. The consequences, if you don't, can be disastrous, especially since you won't be there to keep peace in the family.