How do you approach a conversation with your parents about estate planning? For sure, you don’t want to nag or become a nuisance, creating suspicions about your motives. By being open and honest about your concerns, you can allay their fears that this is only about interest in their money. Talk about the opportunities they wish they had as children that they’d want their kids and grandkids to have — the stories or lessons they want their heirs to hear and advice about finances they want to pass down.
Your parents understand their estate, so during your chat, ask them whether they have a list of names and contact information for doctors, attorneys, financial planners and accountants, insurance brokers, clergy and their closest friends.
Take care of the paperwork
Is there an existing will, and if so, is it up to date? Is it still a true reflection of your parents’ wishes? Let them know it would be good to establish where they keep their will or trust and find out who they’ve appointed as the executor. Did your folks create an online will? Let them know it’s a good idea to have it reviewed by an attorney.
Bring up the topic of power of attorney should they become incapacitated. Mentioning their end-of-life wishes, though an uncomfortable topic, lets them have a voice regarding any of those decisions. You might want to obtain the relevant forms from an elder law attorney, a hospital or a nursing home. A medical or advance directive explains the sort of care they’d like and whether life support should be used to keep them alive. Open the subject of appointing a health care proxy. Tell them about creating a living will that contains instructions for specific conditions, such as terminal illness, or a more explicit directive about a physician’s orders for life-sustaining treatment.
Ask about life insurance. Is there long-term or disability insurance or burial or funeral insurance? Find out the names and contact details of insurance brokers and where your parents keep the documents, and make certified copies if needed. While discussing where to locate documents, find out where your parents’ tax return paperwork is also stored.
Documents are important in estate planning, so making a list of financial accounts — e.g., bank and mutual funds, credit cards, store accounts — will help you. Also, ask them whether they are organ donors. What about a memorial service? Do they want to be buried, cremated or have their remains laid to rest in an alternative way?
Work with everyone
Invite other siblings and family members — new spouses, stepchildren and maybe even former spouses — to be part of the conversation. Gently point out that when you don’t have conversations about scenarios and legal delegations of decision-making authority, default rules from state law take over that may not reflect their wishes. Note to your folks that not having their own desires properly documented may result in you and their other heirs having to engage in expensive and time-consuming court processes.
Talking about death invokes difficult feelings, and it’s understandable that you don’t want to think about your parents’ mortality. You certainly don’t want your dear relatives to think that you’re waiting for them to die — or trying to grab the biggest piece of the inheritance pie. Having a plan to care for their money and property makes it possible to talk about their legacy and about them having a voice regarding their end of life. Let your parents know that building a legacy through their children and grandchildren will establish a foundation for estate planning. And showing them that you are there to do what you can to ensure their wishes are honored will go a long way in allaying their fears.
We welcome the opportunity to put our tax expertise to work for you. To learn more about how our firm can help advance your success, don’t hesitate to contact Kathy Corcoran at (302) 254-8240.
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