During a recent visit with my in-laws, we brought up the topic of what would happen if either of them were incapacitated or passed away. Have they thought about how they would deal with that circumstance? Although an uncomfortable topic to bring up for some, this question began a discussion that helped us understand their wishes and how to plan for them if the unexpected happened. It also allowed us to discuss some of the basic day to day items that need to be addressed in the case of incapacity, such as how the monthly bills get paid. This led to making sure additional signors were set up on bank accounts, learning how to access accounts and where passwords were stored, etc. By the end of the visit, we all felt much better about how we would deal with a health situation if and when it occurred.
Many of our clients have asked for helpful tips on how to begin a conversation with their aging parents to ensure their finances and estate plans are in order. We know these conversations can be difficult to initiate, both for you and your parents. We want to provide you with useful information to make it easier for you to discuss important issues and “what ifs” with your parents.
In a relaxed setting, begin the conversation by asking your parents what is important to them. Ask open-ended questions about how they view the family’s legacy and future generations, family milestones, even if they’ve thought of a family mission statement. Gain an understanding of their wishes for family members’ roles and responsibilities. Communicating clearly now can help avoid problems in the future and make sure their wishes are carried out.
Next, ask your parents for an update on their estate planning, caregiving plans, and charitable giving. Through this conversation, you can start reviewing the basic documents of your parents’ estate plans:
- Last Will and Testament
- Durable Power of Attorney
- Living Will or Advanced Health Care Directive
These documents will cover the most important financial and personal aspects of their life and express their wishes. Having the documents close at hand can take the awkwardness out of conversations with family members who may not wish to think about the day your parents will no longer be there for them.
Encourage your parents to review who they’ve named their trustees, executors, and agents and to ensure there are backups named. As a reminder, these documents should be reviewed every 5 years and updated any time there is a change in life circumstances, such as marriages, births, divorce, or the accumulation of additional property or other assets. This is also a great time for your parents to share with you where these documents are stored. Usually, the signed original is kept with their attorney, with copies kept at home or in a safe deposit box. If your parents do not have these documents, we encourage you to contact us for a referral to an estate planning attorney.
Next, ask your parents for an overview of their investments and financial accounts. They don’t have to give you all the details, just the basics. This is a good time for your parents to ensure their account beneficiaries are aligned with their estate documents. No matter how much or little of their situation they wish to discuss with you, this initial conversation can help you and your parents avoid unpleasant surprises, should you need to make decisions, health or otherwise, that may affect their finances. This will also help ensure their own quality of life for years to come.
Here is an example of an agenda we’ve used for family meetings:
- Family legacy and future generations
- Family milestones
- Family mission statement
- Family roles and responsibility
- Estate planning update
- Caregiving Plans
- Charitable giving
- Family wealth and inheritance
Conversations like these can be a process that builds love and trust in your family. We’re always happy to facilitate a meeting or help you develop a plan for communicating with your aging parents or other family members.