By: David K. Carboni, Ph.D.,CFPⓇ
You may remember the television commercial about how important is to have your cars oil changed regularly. It went something like this, Pay me now, or pay me later. We all knew what they were getting at: either pay attention to what needs to be done today, or you’ll have to deal with the consequences later. The same message applies to the uncomfortable conversation with your parents (or older relatives) on the need for an up-to-date estate plan. Without such a plan in place, the responsibility could fall to you to make difficult decisions when your parents die or become incapacitated. Making those decisions can be doubly difficult if you dont know what their intentions were.
For some families discussing these matters can be threatening. Parents may question the need for such a conversation. It may prompt fears over their loss of independence, incapacity, or eventual demise. Or, they may feel that its none of their childrens business, or even worse, that their children just want their money. Children may be reluctant to initiate the conversation because they may feel as if theyre challenging their parents traditional authority or that they are violating their privacy. Therefore, tact, patience, and persistence are keys to successful conversations.
You’ll first need to discuss what they would like to happen if they were to become incapacitated or die. Once you identify their intentions, its simply a matter of making sure the appropriate documents are in place to carry out their aims.
A good estate plan will ensure that your parents property goes to the right people, at the right time, and in the right form, while minimizing taxes and administrative expenses. Also, theyll need documents to authorize others to act on their behalf in financial and health care matters if they become incapacitated.
Legal documents to accomplish these things will include an up-to-date will. Also known as a last will and testament, a will directs property the will maker owns solely in his or her name at death. If your parents already have wills, they should consider updating them if they:
– bought a new life insurance policy
– bought a time share
– moved to another state
– bought real estate in another state
– want to name a new executor
– got a divorce
– got married (or remarried)
– became estranged from a beneficiary
– had a change in health or that of a changed
– had a birth or death in the family