Stumbling in the dark – Part 1
- Explaining how you might be completely in the dark about a deceased’s plans about leaving you an inheritance and recommending open and transparent discussions with anyone you feel close enough to that they might consider leaving you a gift on their death.
The legal stuff following a death can be a black hole of uncertainty.
I’m referring to the legal processes that transfer the deceased’s wealth to their chosen beneficiaries.
Unless you’ve been informed of their wishes and how they’ve arranged their affairs to make those wishes a reality, you are truly in the dark.
In the movies, the uncertainty is short-lived. All is cleared up at a meeting the family lawyer calls to formally read the will.
A disinherited child finds out right away, likely with something of an explanation. Those receiving an inheritance are told exactly what they will receive.
The reality is very different.
There’s no such thing in British Columbia’s legal system as a “formal reading of the will”.
I’ve written several times about how wealth can pass completely outside of the process where a will comes into play. Even if you have an original and official will that says everything goes to you, the “everything” might have sidestepped the “estate” container that the will applies to, leaving you with nothing.
There’s no central “estate registry” where a close friend or family member of a deceased can go to find out where their wealth has gone or will be going.
You could be left hanging for weeks, months or even years, wondering if it’s just a matter of time before your inheritance is processed.
I am first going to discuss avoiding this scenario from occurring.
Then I will offer some ideas about investigations you can conduct on your own, without having to pay a bunch of money to a lawyer, to try to figure out what’s going on. This part will have to wait until next week.
You avoid a black hole of uncertainty by shining the bright light of clear communication on the issue while the person you’re close to is still alive.
I’ve written about this on at least three separate occasions, specifically about having these discussions with a parent. I’ve acknowledged that it can feel uncomfortable bringing up the issue and suggested using my columns as conversation starters.
The first occasion was in the context of my pet topic of estate planning for blended families. I strongly recommend that children in blended families sit down with their biological parent to ensure their parent is crystal clear about the need for an estate plan that guards against unintended outcomes that I’ve warned about.
The next was in the context of estate tax planning, which is one of the most critical aspects of estate planning. This is an opening for anyone to bring up a parent’s estate plan, to ensure that estate tax advice has been obtained and a plan is in place to follow that advice.
Most recently was in the context of avoiding a surprise arising after someone cozies up to your vulnerable parent and ends up “eating your lunch” by receiving wealth that should have passed on to you. I’ve recommended normalizing estate planning discussions with your parent to avoid surprises.
It’s not just parents you could receive an inheritance from. Consider siblings, uncles and aunts, grandparents and close friends.
I’m suggesting that you invite open and transparent discussions with anyone you feel close enough to that they might consider leaving you a gift on their death.
You might find they welcome the discussion.
If they have made arrangements to leave something to you, the discussion will give them an opportunity to receive your expression of appreciation. You can also share with them how their gift would have a very real impact on you.
Your discussion might lead them to want to bring that positive impact to your life now, when you can most use the financial help, rather than waiting until their eventual death.
If they had not made arrangements in your favour, bringing up the subject might cause them to consider it.
If raising the issue with close friends or siblings whose life expectancy is closer to your own, of course you can also discuss what gift you would be leaving to them in your own estate planning if you were to die first.
Of course, they’re perfectly entitled to keep their estate planning decisions to themselves, leaving you entirely in the dark.
Tune in next week when I will offer some ideas about investigations you can conduct to try to figure out what’s going on if you find yourself stumbling around in the dark.
