As we discussed last week, it's vitally important to understand family dynamics when preparing a will and planning an estate. In fact, books have been written about legal disputes that arise when things just aren't thought through properly.

Take attorney Russell Fishkind's book, "Probate Wars of the Rich & Famous" (tinyurl.com/3fkyyjbw). (Great title, don't you agree?)

Quoting Fishkind, this is where problems start: "Probate litigation almost without fail is caused by the actions of an antagonist or the inaction of a decedent who failed to implement an effective estate plan coupled with one or more of the following recurring fact patterns: a dysfunctional family; a second spouse and children from prior marriages; significant wealth involving a family business; an elder infirm widow or widower who allegedly changed his or her intentions shortly before death; and either a tyrannical or dilatory fiduciary. Should these explosive conditions exist, expect the blaze to follow. After the funeral unspoken words lead to heated words, followed by less than diplomatic late-night emails. Thereafter, lines are drawn, detentes formed, and the best lawyer sought -- all the precursors that lead to battle."

So the idea is to avoid a lawsuit, whether you are a celebrity or not.

The details of these battles sometimes make the news. Legendary singer Tony Bennett died in 2023 at the age of 96. Less than a year later, the two daughters of the singer sued their brother, the trustee of the family trust, as reported by Wealthmanagement.com (tinyurl.com/3h5zxxyc).

The problem? A disagreement about the value of the estate, leading to a challenge against the brother named as the trustee. As reported in the article, attorney Neil Solarz believed that "a judge will mandate an independent trustee, whether it's a private fiduciary or a corporate trustee."

Blended families always need special attention.

"When a parent dies, the typical order of operations for married couples with children is for everything to go to the surviving spouse, and then to their children," Wall Street Journal reporter Ashlea Ebeling wrote in "The Brady Bunch Breaks Down: Estate Fights Tear Stepfamilies Apart" (tinyurl.com/52bvrd74).

"But this can be a disaster for blended families since a surviving spouse often has no obligation to leave assets to stepchildren."

And, don't forget to actually write a will. Actress Anne Heche, who died in 2022 at age 53 following a car accident, died without a will, as USA Today reported (tinyurl.com/2r7t6p3n). Her first-born son (Heche's first marriage ended in divorce) was appointed by the court as the administrator of the estate, but was challenged by the father of her second son. Life can be complicated ...

To help your family, you owe it to them and to yourself to think ahead and plan for the inevitable. Someday, your family will need to step forward to execute your plan or deal with your lack of planning. It's really that simple.

My advice is to get a will if you don't have one. If you do have a will, review it every two years or sooner if any of these life events occur:

-- A birth, adoption or death in the family.

-- A change in marital status (whether it relates to you or your heirs)

-- A change involving a named trustee, executor or guardian

-- The purchase or sale of assets

-- The addition or subtraction of art and collectibles

-- A change in business ownership

-- A change in tax laws

Among the documents to review, especially if there have been changes in how assets are titled:

-- Wills, trusts, powers of attorney and health care proxies.

-- Bank and brokerage accounts and other investment statements. (Look for changes in ownership.)

-- Beneficiary designations for IRAs, 401(k)s, 403(b)s and other retirement accounts.

-- Ownership of life insurance contracts and death benefits.

Communicating your wishes through correct documentation is an important part of transmitting an inheritance. Make sure you do your homework and keep up with any changes. Don't forget family dynamics. Bottom line: Do not put this off.

If you would like to read about integrating financial and estate plans, email me at readers@juliejason.com. I can send you an article I wrote for a law publication on the topic.

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There’s a huge wealth transfer coming to the next generation -- more than $84 trillion through 2045, most of which ($53 trillion) is represented by transfers from the baby boomer generation, according to Cerulli Associates, an international research and consulting firm, (tinyurl.com/nhbrsdd3). Cerulli estimates that $72.6 trillion will transfer to heirs and $11.9 trillion to charities.

No matter the size of a potential inheritance, there is no question that the subject can be not only sensitive, but also emotionally charged. Dealing with the loss of a parent is stressful in and of itself. But I can tell you from 30 years of personal experience working with families, there is more.

There is the interplay between siblings and other family members; the learning that needs to take place when dealing with handling estates, perhaps for the first time; the emotional strain of personal grief; the possibility of discovering something new or surprising about a parent’s wishes; and vulnerability due to lack of knowledge of wills, trusts and finances.

That’s not all. More than 1,000 individuals with at least $3 million in investable assets who participated in the recent Bank of America Private Bank Study of Wealthy Americans (tinyurl.com/yma3bnuf) shared theses stress points: unequal distribution of assets; lack of clear instructions and documentation; lack of trust/transparency in an executor or trustee; lack of communication; and the most common reason reported -- interpersonal family dynamics (59% of respondents).

The good news is that these matters can be addressed in advance. Communication is key. In working with clients and their families during vulnerable times, I see what works and what doesn’t, and it all turns on how families communicate.

Cerulli Associates recommends “making family events a regular part of the advisory process” to improve relationships between generations (tinyurl.com/nhbrsdd3). According to Cerulli’s 2021 report on wealth transfer, “family meetings and regular communication (81%) is considered the most-effective wealth transfer planning strategy by [high-net-worth] practices, followed by educational support (59%) and organized succession planning (31%).”

Further, “extending interfamily relationships to involve the entire range of stakeholders rather than just the current controllers of that wealth will create a greater sense of responsibility and inclusion among heirs.”

In some cases, parents discuss their own personal finances with their children as well as their legacy interests, and in others, they don’t. (If you are on the fence about monetary disclosure, keep in mind that once that door is opened, you can’t close it.)

In my experience, those families that succeed in sharing information have children who are financially and emotionally comfortable themselves.

Beyond frequent and effective communication with heirs, implementing a plan and making necessary adjustments are also key. Unfortunately, only a fraction of wealthy Americans seems to agree.

Less than half of those surveyed by Bank of America have the basics of estate planning in place, despite their wealth. (“Basics” is defined as including a will, living will/or advanced healthcare directive and a durable power of attorney). This includes 54% of those who are 44 or older.

Also, only 29% of respondents reported that an estate should be updated at regular intervals (i.e., annually). More popular reasons to update an estate plan were tax law changes (38%); significant changes in wealth (35%); and a life event, such as a birth, marriage or divorce in the family (34%). In other words, it is more popular for the wealthy to be reactionary with estate plans than to be strategic.

If you are in the group that will be handing down money to heirs, being strategic is a must in both your planning and in your communication. As Benjamin Franklin said, “An investment in knowledge pays the best interest.” Knowledge must be passed down along with wealth.

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The oldest Generation Xers (those born between 1965 and 1980) are turning 60 next year. If you're one of them, you'll have a lot to think about since retirement is on the near horizon. Are you prepared?

That's a question studied by Natixis Investment Managers and presented in a new report titled "Natixis Global Survey of Individual Investors" (tinyurl.com/3nhv4ssv). The survey of 8,550 individual investors in 23 countries pointed out some challenges facing this demographic.

Most (82%) Gen Xers surveyed understood that "it is increasingly their responsibility to fund retirement on their own."

Feeling that responsibility should lead to educating oneself -- the sooner, the better -- and worrying about certain things is not a bad place to start.

It turns out that 48% of those surveyed said they were worried they won't have saved enough to enjoy their retirement. Forty-one percent said inflation "is killing my dreams of retirement" (a subject I discussed in a recent column titled "Is Inflation Affecting Savings Rates" -- email me at readers@juliejason.com if you would like a copy).

Thirty-seven percent were worried that their government benefits would be cut. Thirty-one percent said they would never save enough to retire (19% of those surveyed said that even if they saved $1 million, they still couldn't afford to retire).

To me, those worries are healthy and realistic. But this observation is not: expecting long-term returns of 13% above inflation. That's hardly a good figure to use for planning purposes. Here is another misconception: 61% of Generation X investors think index funds are "less risky," and 67% think index funds "are going to protect them on the downside," but "[i]nvestors forget that index funds deliver market returns."

Just think of the bear markets we've experienced. The coronavirus bear market saw a quick decline of 34% in just over a month. And Generation X has experienced some interesting investing times, described as a "25-year bust and boom cycle" by the Natixis report, which cited the tech bubble burst in 2000, the global financial crisis of 2007-2008, and "a decade-long bull cycle that pushed markets to record highs."

This is where it might help to retain financial expertise. And, indeed, 56% of Gen Xers were "convinced they need[ed] professional advice on topics ranging from achieving broad financial planning goals to more specific retirement income plans."

An appropriate retirement expert might help them realize that the most important risk to consider is the risk of not meeting their retirement goals. (Only 11% of those surveyed reached that conclusion, while more respondents defined risk in terms of volatility (25%) and losing wealth (23%).)

Volatility would also be considered, but probably in a different way. We all have to be aware that financial markets have an ebb and flow. Each and every year, even in up years in the market, we experience intra-year declines. Those have to be factored into the equation, as well as bear markets that take time to recover.

While 62% of respondents said they were comfortable taking on risk (which I interpret as risk of loss) to get ahead, 72% also said that, if forced, they would choose safety over investment performance, and 47% indicated they were taking on more risk than they should to get ahead.

That's indicative of mistaken beliefs about how retirement portfolios need to be structured to meet the goal of preserving your lifestyle and, in the right circumstances, perhaps leaving a legacy.

If you are a member of Generation X (the youngest in this category turn 45 in 2025), are your goals and plans in place?

One final point: "Almost half of Gen Xers surveyed (48%) [said] it's going to take a miracle to retire." You don't need a miracle. Just some preparation.

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