Like other Texans who are at or reaching retirement age, your parents may not be particularly interested in discussing estate planning. However, as they continue to get older or develop chronic health issues, you may need to push them into considering it gently.
More than likely you understand their reticence since few people like to sit and contemplate their death. As you take a more significant role in caring for your parents and their finances, they may need to face not only the prospect of passing away but also of the potential for a time when they can no longer make decisions for themselves.
One way to broach the topic of estate planning is your need for information regarding the medical and financial professionals in your parents’ lives. It may also help to have a clear understanding of what assets your parents own. This could include one or more of the following:
- Deposit accounts
- Retirement accounts
- Life insurance policies
- Real estate
Make sure that you also discuss any online accounts they may have since more financial institutions are doing business online than ever before. In addition to these assets, your parents could have accumulated a significant amount of personal property during their life together.
Discuss making a plan
Having a clear understanding of the assets and liabilities your parents have is just the first step. They will need to decide how they want to dispose of their assets after death.
They also need to choose one or more trusted individuals to take over the management of their affairs during life, if needed, and to handle the estate after death. Once you have made these decisions, documenting their wishes could involve the following documents:
- A will
- A trust
- A durable (financial) power of attorney
- A medical power of attorney
- Advanced directives
Of course, a will only becomes effective after death, but a trust has utility during life and after death. The other three documents would come into play in the event of incapacitation and expire upon death.
Know what combination of documents works best for your parents
Do your parents want to limit the authority of an agent-in-fact if they can no longer make decisions on their own? Do they want to require a doctor’s verification of incapacitation before a power of attorney becomes effective? What kind of trust would provide your parents with the most benefit during life and the most benefit to the beneficiaries after death?
These are just some of the questions that need answering before signing any documents. You may help your parents get the answers they need, but it would be best if you did not actively participate in the process if you inherit any property after their deaths. Avoiding the appearance of impropriety may make the settlement of the estate go more smoothly, especially if you have siblings who aren’t involved in these discussions.
How have you approached these difficult conversations with your parents?