Communication is big missing element in estate planning

Reading through the estate planning section of the most recent Family & Finance study by the personal finance behemoth Fidelity, I was reminded of the line from the film "Cool Hand Luke." "What we've got here is failure to communicate."

Take these three findings. First, 92 percent of surveyed parents expect one of their children will be the executor of their estate. That makes sense, doesn't it? Problem is, 27 percent of the kids identified as filling this role didn't know they had the responsibility. Second, three out of 10 families surveyed disagreed whether or not the children knew where to find important family documents, such as the will. Third, 69 percent of parents said they had detailed conversations with their children about wills and estate planning. But 52 percent of the kids say they haven't had those discussions.

Like I said, what we have here is failure to communicate.

I hope you have a will. Studies estimate that more than half of American adults don't. If you're reading this column and you don't have a will, please create one. A will makes it easier on your heirs to deal with your finances when the inevitable happens — expectedly or unexpectedly.

A will encourages you to think about what kind of legacy you would like to leave behind. You get to decide where you want your possessions and money to go. Family. Friends. Charity. You pick the executor of your estate. Of course, most importantly if you have young children, a will is a critical part of your children's safety net if tragedy strikes. A will lays out your wishes when it comes to choosing a guardian for your children and allows you to make arrangements for managing their inheritance. Without a will, state law takes over.

There's no excuse for putting off a will in the digital age. There are a number of good "do-it-yourself" online will-writing products. The more complicated your estate, the more it makes sense to work with a lawyer.

Sticking with the concept of communication, I'd consider leaving behind an ethical will or legacy will. This kind of "will" isn't legally binding. Instead, it's a statement of your values you want to pass on to your children, grandchildren and other family members.

Although there is no right way to craft an ethical will, the basic idea is to tell stories about your life you would like to pass on to future generations and lessons learned over a lifetime. You can write your ethical will, record it or videotape it. Think of it as a valuable conversation with your family and future family members.

Chris Farrell is senior economics contributor, "Marketplace," commentator, Minnesota Public Radio.