Can You Motivate Your Heirs After You're Gone?

Estate planning is an essential part of everyone's life, regardless of the size of their estate. It involves determining how your assets will be distributed and who will manage them after you pass away. However, it is equally important to consider the motivations of your heirs after your death. You may want to motivate your heirs to work with a financial advisor, make collaborative decisions, or consider specific factors when making distribution decisions. Kiplinger’s recent article entitled “I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge,” says it would seem that using phrases such as “I wish,” “I hope,” or “I desire” — known as precatory language — would never belong in a will or trust. However, there are important cases where it can be helpful to include non-binding guidance for your loved ones and estate representatives. This post will explore how you can motivate your heirs after you're gone.

Using Clear and Precise Language in Estate Planning

Using clear, direct, and unambiguous language in your estate planning documents is crucial. Unclear language can cause confusion and disagreements between your beneficiaries, which could lead to a prolonged and expensive probate process. Your will or trust should be drafted by an experienced estate planning attorney who understands your unique circumstances and can help you achieve your goals.

Incorporating Precatory Language into Estate Planning

Precatory language is a term used to describe language that expresses a wish, desire, or hope but does not create a legally binding obligation. While it may seem unnecessary to include precatory language in a will or trust, there are specific instances where it can be helpful to motivate your heirs and provide non-binding guidance to your loved ones and estate representatives.

Encouraging Beneficiaries to Work with a Professional

According to a recent report, baby Boomers will pass on over $70 trillion in wealth to younger generations. Therefore, it is essential to encourage your beneficiaries to work with a professional to preserve and protect their assets. If you have a great relationship with your financial advisor or estate planning attorney, you may want to encourage your beneficiaries to consider working with them. Including language in your will that encourages your loved ones to meet with an adviser could be just a reminder they need to set an appointment after you pass. For instance, you could use the following wording:

"I desire that my children consult with our family adviser, Sally Brown, or another competent professional adviser of their choosing to manage their inheritance."

By including this language in your estate planning documents, you can ensure that your beneficiaries receive the best possible advice and guidance to manage their inheritance. This guidance can help you motivate your heirs by guiding them to make informed decisions about their finances and investments and avoid costly mistakes.

Encouraging Co-Trustees to Collaboratively Make Decisions

If you have named three or more co-trustees, you may have said they act by majority consent to streamline the decision-making process. However, this may not always be the best approach. In some cases, it may be better for your co-trustees to work collaboratively and make decisions in the best interest of the beneficiaries, even if they do not agree unanimously. For example, you could use the following language:

"I desire that my co-trustees work collaboratively and make decisions in the best interest of the beneficiaries, even if they do not agree unanimously."

By including this language in your estate planning documents, you can encourage your co-trustees to work together and make informed decisions that are in the best interest of the beneficiaries. This approach can help avoid conflicts and disagreements between your co-trustees, which could delay the distribution of your assets and cause unnecessary stress for your beneficiaries.

Encouraging Trustees to Consider Specific Parameters

A typical trust arrangement gives an independent trustee the power to make distribution decisions to beneficiaries at their sole discretion. This gives the trustee the most flexibility to ensure that the beneficiaries' needs are met to the appropriate extent. However, you can add factors for the trustee to consider when exercising their discretion. For instance, you could use the following wording:

"I encourage my trustee, in the exercise of their discretion, to consider requests related to educational pursuits, particularly those that will advance the beneficiary's career prospects."

By including this language in your estate planning documents, you can guide your trustee's decision-making process and ensure that your beneficiaries' needs are met in a way that aligns with your values and priorities. This approach can also help prevent your trustee from making decisions that are not in the best interest of the beneficiaries or that conflict with your wishes.

Benefits of Motivating Your Heirs

Motivating your heirs after you're gone can have several benefits. Firstly, it can help ensure that your assets are managed effectively and efficiently. By encouraging your beneficiaries to work with a financial advisor or meet with your family advisor, you can help them make informed decisions about their finances and investments. This guidance can also help prevent your beneficiaries from making costly mistakes or engaging in risky behavior that could jeopardize their inheritance.

Secondly, motivating your heirs can help prevent conflicts and disagreements between your beneficiaries. By encouraging your co-trustees to work collaboratively and make decisions in the best interest of the beneficiaries, you can help prevent conflicts and disagreements between them. This can help streamline the decision-making process and ensure that your assets are distributed according to your wishes in a timely and efficient manner.

Finally, motivating your heirs can help ensure that your legacy is preserved and passed down to future generations. By encouraging your beneficiaries to consider educational pursuits or other activities that align with your values and priorities, you can help ensure that your legacy is passed down to future generations. This can help preserve your family's values and ensure that your beneficiaries understand the importance of giving back to their community and positively impacting the world.

Conclusion

In conclusion, estate planning is about determining who gets what after you pass away and motivating your heirs to take certain actions that can help them preserve and protect their inheritance. Precatory language can be an effective tool to encourage your beneficiaries to work with a financial advisor, make collaborative decisions, or consider specific parameters when making distribution decisions. By including this language in your estate planning documents, you can ensure that your assets are managed effectively and efficiently, prevent conflicts and disagreements between your beneficiaries, and preserve your legacy for future generations. If you are unsure about how to incorporate precatory language into your estate planning documents, consult an experienced Austin estate planning attorney who can guide you through the process.

Reference: Kiplinger (March 21, 2023) “I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge”