IMPORTANT QUESTIONS YOU SHOULD ASK ABOUT YOUR PARENT’S ESTATE PLAN
Even if death is a macabre and difficult subject for you, discussing your estate plan with your family is incredibly important. If you are a child of aging or elderly parents who are reticent to disclose their estate plan, here are some basic questions that you should ask your parents about their estate plan.
Yes, I am an attorney, but no, I am not your attorney. Nothing in this post creates an attorney-client relationship, and nothing in this post is legal advice. You should always discuss your particular circumstances with an attorney in your jurisdiction. Further, as an Amazon affiliate, I may make a small commission from any purchases you make through affiliate links on this site.
Estate planning attorneys are bound by confidentiality. With limited exception, an attorney can’t tell the kids, the friends, or even the beneficiaries about the details of someone’s estate plan. However, as an estate planning attorney, I firmly believe that an important step in the estate planning process is to discuss the estate plan with your family.
(TO READ MORE ABOUT WHY YOU SHOULD DISCUSS YOUR ESTATE PLAN WITH YOUR FAMILY, CLICK HERE.)
REFRAMING THE CONVERSATION AROUND DEATH AND ESTATE PLANNING
Some parents don’t like to talk about. Others believe that anyone who asks must have ulterior motives. Death can be a difficult and emotional subject. Wealth can be an equally taboo subject.
To discuss death and money in the same conversation has the potential to create a powder keg.
So, even if your parents or loved one refuses to talk specifics of their estate plan, there are still important pieces of information that you should know.
And, if you are the child or the caregiver of an aging or elderly parent or loved one, you might have to initiate the conversation. You may even have some hurdles to overcome.
Some people view the conversation about estate plans as intrusive or greedy.
However, if you reframe the conversation by explaining that a discussion about estate plans could not only ensure that the estate plan is effective but could also dramatically lighten the load for the children, then you might have a way to start the conversation.
In many cases, having a full and frank discussion about estate plans can help ensure that a plan is successful. Further, knowing a few basic details, while not disclosing the intricacies of the estate plan, can assist the personal representative or other responsible parties in knowing where to even start.
Discussing your parent’s estate plan with them is not about greed or even death. Instead, it is about making sure that you (or the appropriate party) can efficiently administer their assets according to their wishes.
Correspondingly, providing information about an estate plan ensures that the parents remove a lot of the stress of the unknown from their children. It’s about peace of mind, legacy, efficiency, and honoring your parents.
ESTATE ADMINISTRATION CAN BE A BURDEN ON CHILDREN
In the overwhelming majority of my cases, parents name children as both the personal representatives and the beneficiaries. Correspondingly, most parents don’t want to be a burden on their children.
Having a frank and honest conversation about their estate plan and your parent’s wishes can only lead to a more efficient estate administration process. Keeping the details a secret can lead to uncertainty and a difficult end-of-life or probate process.
(To read more about why you might want to avoid probate, click here)
But, what do you do if your parents are reticent or wholly unwilling to have that conversation with you? What are the basic need-to-know questions that you should ask?
IMPORTANT QUESTIONS TO ASK YOUR PARENTS ABOUT THEIR ESTATE PLAN
Here are 3 questions that you should ask your parents about their estate plan even if they don’t want to disclose particulars:
1. Who is in charge?
Children should know who is in charge of the estate. What’s more, children should also know who is in charge of making decisions in the event of their parent’s incapacity.
You should be able to ask your parents who the attorney-in-fact (power of attorney), healthcare representative, and executor are.
Is Son the attorney-in-fact for property while Daughter is the healthcare representative? Who has the authority to write checks? Who has the authority to talk to the doctor?
In the event of death, who will be the person in charge of collecting, accounting for, and ultimately distributing the assets?
Your parents don’t have to disclose their nestegg, their net worth, or even their distribution percentages if they don’t want to. However, children should know who is in charge.
Ask your parents who the personal representative (executor), attorney-in-fact, and fiduciary representatives are.
2. Where do you keep your estate plan?
Most states require that you file the original will to open probate. Most trusts have a designated successor trustee. And, most investment professionals keep record of the beneficiaries of particular accounts.
However, if you do not know where to locate the original will, who has the copy of the trust, or where the accounts are invested, you will not know how to collect and administer them. Ask your parents where they keep their will or other documents –whether with an attorney or in a safe.
There are enough other things to do after a person dies that an Easter egg hunt for the will is not something your children will appreciate.
Make sure that you know where to find the documents, or make sure that someone knows where to find the documents, if something were to happen to your parents.
In some scenarios, mom and dad made a will but never told anyone where they put it. Months after the estate is settled, the kids find it locked in a safety deposit box, hidden in a box of paperwork, or at a long-lost attorney’s office.
Knowing where your parents keep the documents that comprise their estate plan can be a huge help in making sure that you can ultimately honor their wishes.
3. Who are the trusted professionals in your life?
Do your parents always use the same CPA, attorney, or investment professional? If so, those people are likely the same people who can or will help you when your parents pass away.
Many issues that can arise after a person’s death, such as the treatment of retirement funds or basis adjustments, may have already been contemplated by an attorney or CPA.
These same people might be who have the estate planning documents in their offices (see #2).
Again, your parents don’t have to disclose the beneficiaries or the values to you, but you should know who to contact for professional help.
The year that you lose a loved one or receive an inheritance is a good year to make sure that you have good professionals advising you. Knowing whether you owe taxes, whether you have any income, or how to divide accounts for minors can be tricky. You want to have someone in your corner who knows what they are doing.
ASK YOUR PARENTS THESE QUESTIONS ABOUT THEIR ESTATE PLAN
Some folks are very reluctant to share specifics of their estate plan. For fear of fraud, greed, or even guilt, many parents don’t want to talk about their estate plan.
Although I am a firm believer that estate plans should be discussed with family or close loved ones, some people are still hesitant to share.
In an effort to ensure that their estate plan is still effective, children should know at least who is in charge, how to access the documents, and whether there is a trusted professional involved.
Without these bits of information children may be less likely to honor the wishes of their parents or even locate the documents!
Have these sometimes difficult conversations with your parents today to make sure that you honor their legacy.