As part of National Estate Planning Awareness Week and as we head into the holidays, especially for those in the “sandwich generation” (folks who are caring for both their children as well as their parents simultaneously), consider having the conversation with your parents as to whether they have any estate planning in place and, if so, whether it may be time for a review to ensure that their plan is still consistent with their wishes and changes in the law.
Although speaking with your parents about their finances and estate planning may be difficult, having this conversation sooner rather than later is key to providing peace of mind for you and your family, and to ensuring that your parent’s wishes will be effectively carried out upon their incapacity or death.
Estate Planning for Your Parents
Talking about the future with your parents — including their estate matters, finances, and memorial wishes — is one of the most important conversations you can have. Below are some key topics you should discuss with your parents to make sure their estate planning is in proper order:
- Last Will and Testament and Revocable Trust. If your parents do not have a will in place, they most likely do not have any other estate planning documents. If they do have wills, you should confirm how long ago they were drafted, who the executor will be, and where the original documents are located. A revocable trust may also be appropriate depending on your parent’s circumstances and wishes. Explain to your parents that you do not necessarily need a copy of the documents or need to know the exact terms, but at the very least you should know where the documents are located so you can ensure that their wishes are carried out.
- Advanced Medical Directive and Powers of Attorney. Make sure your parents have advance medical directives (living wills) and powers of attorney, so that someone they trust and of their choosing will be able to make financial and health care decisions on their behalf if they are unable to do so. You should also have a thorough understanding of their feelings about end-of-life health care decisions, and how their financial and medical affairs should be handled should they become incapacitated.
- Insurance policies. Find out what insurance policies your parents have and where the policies are located in the event one or both become incapacitated. This includes knowing about health insurance (private or Medicare), life insurance, homeowners, auto insurance, disability insurance, and long-term care policies.
- Financial and investment accounts. Your parents should consider compiling a list of their brokerage, bank, and mutual fund accounts as well as the account numbers, and consolidating their account to the extent possible. This will make things easier if someone needs to step in and assist with financial matters in the event of their death or incapacity. Also, don’t forget about digital assets and ensuring that access can be gained to any online accounts if needed.
- A team effort. If your parents have legal, tax and/or financial advisors, make sure to get a full list of the advisors’ contact information. You should also have the contact information of your parents’ doctors, in the event end-of-life or other health care decisions need to be made for them.
For more information on the various documents that are essential to any parent’s estate plan, please refer to this handy Estate Planning Essentials Guide and take our quick Estate Planning Check-up. Please also check out this helpful video from Jill Schlesinger and Money Magazine on how to get started. The Real Property, Probate and Trust Law Section of the American Bar Association also offers an informative webinar and FAQs on their website.
Why Estate Planning Matters
Failing to have a well-designed estate plan often leads to chaos, unnecessary costs and taxes, potential hurt feelings, delays in distribution of assets, and other unexpected outcomes in the event of your parent’s incapacity or death. Do not let fear or discomfort keep you from having this important conversation.
As experienced estate planning attorneys, we can advise you and your parents on the various planning options available to ensure that their wishes are carried out, and coordinate with your parent’s other advisors to implement a cohesive plan to provide peace of mind to you and your family. Don’t Worry, We’ve Got This!