This is one of the most sensitive subjects that a family never talks about. Parents rarely discuss money when their children are young. And they rarely talk about their financial situation when the children are grown up and the parents are getting frail. But as difficult as it may be, you should try to have a frank discussion with your parents about their money situation and their estate planning. In many ways, it could impact your life and your money.
Maybe you are lucky and your parents have a large amount saved. Now you know that it is unlikely that you will need to support them financially. It is possible, however, that an inheritance from them may increase your assets to the point where you will owe estate taxes. And your estate plan may need to change to shelter those assets from taxes. Or, your parents could have left the maximum amount possible to your children. Would that change your plans in a different way?
Perhaps when you talk to your parents, you may find out that they wrote a will when you were a small child and the will hasn’t been updated in 20-30 years. That will probably does not carry out their current wishes and your parents should be calling their estate planning lawyer immediately for a new will.
It is even possible that your parents do not have a will, a durable power of attorney or a health care proxy. And that can be a time bomb waiting to happen. You could receive a call in the middle of the night from one parent that the other was just rushed to the hospital and no one had any idea what your parent would have wanted for in the event of catastrophic illness. And your other parent doesn’t know where the financial documents have been kept or who to call. That scenario doesn’t need to happen.
If you find it awkward to start this conversation with your parents, talk about it in terms of how a “friend” found themselves in the situation where one of her parents suddenly died and the other parent was caught unprepared for managing life alone. You can emphasize that you are having this talk so that you can carry out their wishes and lessen the burden on the surviving parent. You can also focus on the planning that needs to be done to ensure that their last years are spent as close to their plans as possible. If one of them is ill and may need a nursing home in the future, you should suggest a call to an elder care lawyer. Find out where the documents are located and who should be called if there is a medical emergency or if there is a death. Make sure you know about funeral desires, pet care, and computer passwords. You may need to broach the subject more than once before they open up and really talk about their estate planning and their finances.
Finally, estate planning is more than money. There may be keepsakes that they would want you or your sibling to have or jewelry that they no longer wear that they may want to pass to you now. If there are stories from your parents’ childhood that you want to record for the future, sit them down with a camcorder and let them talk about their childhoods, about your childhood, and about family history that you only knew bits and pieces about. Ask questions about your parents’ values, life lessons, and memories that they want your children to treasure as much as they do.
You will be very glad if your parents will open up about their estate planning to you and your siblings now before there is a crisis. Estate planning when there is an emergency is the worst time to plan.
