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Importance of an Estate Plan
Estate planning isn’t only planning for what happens with our things after we die, but it is also about planning what to do with our things if we can’t tell anyone while we are alive. Having this talk with a loved one, parents in particular, can be difficult and confrontational, but it shouldn’t be. So how should this conversation be started and what can you do to get the process started? I’ll give you some ideas that can build on themselves and hopefully get your loved ones a full estate plan in place. Please keep in mind small steps over time can be very helpful, but trying to get this done in one day can be overwhelming.
Ask Them For Advice About Your Estate Plan
Parents typically love giving advice to their children, and what better advice to ask them than how to plan for your own family. Casually mention to them you were looking at life insurance policies and ask what type, company, and policies they use and if they recommend them or not. Then ask who the beneficiaries should be. Ask who their beneficiaries are to compare. Do the same for any retirement accounts. Ask them who should be the primary beneficiaries or secondary beneficiaries and see who their beneficiaries are. If they mention aunt grace, who’s been dead for 13 years, is their beneficiary or they don’t know, say “maybe you should take a look.”
If the only thing you get out of this process is your parent or loved one adds or updates their beneficiaries, then that is a huge win. Adding beneficiaries, especially to retirement accounts, avoids the account going into their estate upon death and being subject to creditors, but also has very favorable tax benefits.
Ask Them About Where They Want To Live
Having a simple conversation with your loved one or parent about where they want to live can give you some very valuable information. Do they want to down-size, live with other people their age, or not have to worry about maintenance? This can give you a clue into how they think they are doing physically and financially.
If they do want to move, then it could be a good opportunity to have further discussions about setting up the new home properly for planning purposes. It could be as simple as asking the real estate attorney handling the transaction their opinion, or preferably, calling an attorney who specializes in estate planning or Medicaid planning. This will at least get your loved one thinking that perhaps there are some strategies they are unaware of maybe it is worth considering looking into.
If they don’t want to move, then the conversation can end there. Or you can simply ask what they want to do with the house or who they would want to get the house when they pass and if there is any plan set up for it. Again, this may get them thinking about some planning, and while a will would be helpful here, a simple solution could be making a minor change the deed.
What Should We Do If Something Happens?
Ask your parent if they thought about what they want to happen if they ended up unexpectedly in the hospital and if anyone knows what should be done. If they say to you they want a “do not resuscitate order”, or they want life sustaining treatment, suggest to them that it should be in writing. Ask them if there is anyone they would want to make healthcare decisions if they can’t speak or communicate.
Let’s Talk Finances
In estate planning, I believe the most difficult conversations with aging parents or loved ones involve finances and the appearance of giving up control. So conversations involving money and “power of attorney” can become heated or argumentative. Keeping the conversation level is important in keeping your loved one engaged in the discussion.
Present your loved one with the same problem as being in the hospital and unable to communicate. If they can’t tell you what they want done medically, what about taking care of their finances? How is someone going to pay their bills, transfer money from their savings to their checking account, or write a check to their landlord? Explain to your loved one that having someone able to do that can let them focus on getting better. Instead of having to worry about paying their bills, your loved one’s “assistant” can take care of their affairs. Something as simple as writing a check becomes very difficult once someone can’t do it for themselves.
It can also be helpful and set their mind at ease to explain that having someone they trust, or two people they trust, to take care of their finances while they are unable to is of utmost importance. Additionally, while I prefer drafting durable powers of attorney that are effective immediately, there are also options to have the power of attorney only come into effect upon incapacity. This option may be attractive to someone who may have trust issues, but still be effective in times of necessity.
Did You Get Their Attention?
An estate plan and end of life planning are difficult conversations and not something really anyone wants to talk about. However, it is inevitable we will all die. Getting an estate plan in place can make it significantly easier and less stressful for our loved ones. Starting the conversation can be awkward and emotional but taking a few of these tiny steps a little at a time may help get your parents or loved ones a proper plan or at least thinking about it. Eventually it is best to involve a competent estate planning attorney. Think of hiring an attorney as an investment that can save time and money in the long run.