Did you realize that more than half of Americans either lack an estate plan, or have one that is out-of-date? That is taking an enormous, and unnecessary, risk. Why? The reason is simple. If you do not decide how to protect and pass on your wealth, then the state can, and your loved ones may not like it.
How do we move forward then?
How do we ensure aging parents are motivated to plan?
Let us share four ways adult children of aging parents can help their parents create a sound estate plan.
1. Start the Conversation with your aging parent.
Talking about money can be uncomfortable, even in close parent-child relationships. Compound that with asking about end-of-life concerns and it may be doubly difficult. It is important to raise these issues, however, before elder parents are no longer able to act competently or express their end-of-life desires.
2. Organize Information Early.
Gather key financial, health care, and legal information, and organize it into a single document. This should include contact information for attorneys, financial advisors, and physicians, as well as, specifics about bank accounts, investments, real estate, personal possessions, medications, insurance, and other items.
3. Create a Durable Power of Attorney.
A power of attorney allows for a trusted person, like an adult child of an elder parent, to make legally binding decisions on behalf of another person. A durability provision would allow the adult child “agent” to make decisions when his or her elder parent is incapacitated. Without durability, a court or third-party may request or be required to make important decisions impacting the aging loved one.
4. Work with an Attorney to Create a Will, Trust or Both.
A will provides instructions for the distribution of assets after death. A trust agreement does the same, but with many areas of differentiation. For instance, a trust can be managed during one’s lifetime, generate income, and avoid probate upon execution. Wills and trusts can also work together in a single estate plan, as is often the case when minor children or grandchildren receive an inheritance. Your attorney can let you know what estate planning documents are right for you.
There is no question estate planning often involves complex legal considerations. It can be hard to identify and to know what you need without the guidance of an estate planning attorney. Do not hesitate to ask us your questions so we may help you with the estate planning needed by your aging parents.