I've seen families destroyed by this common estate-planning mistake. Here's how to protect yours.

By Joe Maier

It's not enough to do everything 'right' on paper

Clarity and values can be more important than money.

I read a study years ago that fundamentally changed the way I thought about estate planning and how I practiced it as an attorney and, later, a wealth adviser.

It centered on a deceptively simple question: Why do estate plans fail? Or put another way, why is wealth so often lost by the next generation?

I assumed the answer would be "bad planning" or "no planning." But by a wide margin, the real answer was something else entirely: lack of trust and lack of communication. That forced me to re-examine situations I had already lived through - cases where things didn't go the way they were "supposed" to go, even when clients thought they had done everything right on paper.

For example, I remember one situation early in my career in which one child received her inheritance outright while her siblings' inheritances were left in trust. When I explained why the parents made that decision, given the lack of relationship and trust between the children and me, the children with trusts did not believe my explanation, choosing instead to believe Mom and Dad thought they were "lesser" than their sister.

The disparate treatment created conflict between the siblings who don't speak. I am confident that if each child heard the explanation directly from their parents, either they would have understood and appreciated their intent, or the parents would have had the opportunity to hear their kids' reaction and, based on those unintended feelings, would have changed the structure of the plan.

Either way, because that conversation never took place, a family was destroyed.

In a planning context, there comes a point when conversation naturally shifts from "What do we own?" to "What impact is this wealth going to have on people who aren't in this room right now?" That leads to a hard but necessary question: "Do we need to bring them into the room?"

Mortality and trust

Here's something I find fascinating: The architecture of the plan often shows that parents do trust their kids - they're leaving them significant assets. But then you ask if they're willing to share any portion of the plan, any values, any beliefs, any hopes and wishes - and you hear, "They don't need to know anything right now."

But life can change in an instant, and that plan may need to be enacted tomorrow. I love the honest conversation where the adviser holds the mirror up with deep empathy - no shame, no blame - and says: "This is the plan you created, and this is how you're behaving right now."

There's a misalignment here, and it's likely due to some discomfort. Maybe it is a general uneasiness when it comes to talking about money. Or it could be worry that comes from helping the children understand a plan designed to protect them from their weaknesses requires a discussion of those imperfections.

Then, most clients get to a place of: "OK, let's build a meeting agenda we can be comfortable with. We can talk about structure and decision-making. We can talk about what matters to us. We can talk about what we hope for you, what would disappoint us, and how you incorporate those things into how you manage what we leave."

Clarity about structure and roles

A family meeting doesn't need to delve into numbers. It is about providing clarity that legal documents, on their own, never can. So, at a minimum, a meeting should help children understand the architecture of your plan.

-- How property is going to transfer

-- Who will make decisions if you can't

-- What it means to be a trustee or a personal representative

-- What you want them to consider when they're making decisions

Without conversation, kids don't know what it means to be a trustee or personal representative. They may not even know what it means to transfer property, own property or make investment decisions.

The importance of role clarity is especially clear regarding healthcare decision-making. You can only choose one healthcare power of attorney. Parents often say, "I know exactly what decisions my kids would make." Likewise, kids often say, "I know exactly what Mom and Dad would want." But I've seen healthcare powers of attorney activated, decisions made, and the parents survive - and be surprised by the decisions that were made. That misalignment matters.

In my experience, the best way to take burdens off people you care about is to tell them what you want.

Deeper understanding

Sometimes, the most powerful aspects of family meetings have nothing to do with the technical plans. They were about the "why" - mom and dad's financial-origin story. It's so common for kids to never really understand how their parents grew up with money and how that shaped them. And when parents explain it, it creates deeper empathy, deeper understanding, deeper communication - because it finally explains the "why" of mom and dad.

This is worth doing now, rather than through a letter to be opened later - so you can see the benefit of deeper understanding while you're still here. Of course, a letter is better than nothing. But it doesn't allow kids to ask you questions, not as an attack but as in "I want to understand."

A legacy of alignment

Ultimately, a family meeting is about clarity and values more than money. It's about making sure that when your children say, "Here's what Mom and Dad would want," they're not guessing.

The family meeting is a gift: understanding, reduced burden, and alignment between what you believe and what you've built. And in my experience, it's one of the most powerful planning tools a family can ever use.

Joe Maier, JD, CPA, is senior vice president and director of wealth strategy at Johnson Financial Group. He specializes in business succession, financial and estate planning, and post-death administration needs.

-Joe Maier

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08-01-26 1206ET