Attorney & Mediator
Attorney & Mediator

Estate Planning at the Holidays?

This is an issue that really gets shoved to the back burner at the holidays. After all, it does not sound very merry to think of the issues that surround estate planning when what we want to do is be happy and joyous. Additionally, holidays bring enough bills, right?
The holidays are a time when we purchase lots of gifts for our family – toys for the kids, things for our parents, siblings and spouses. How many of these items really get used and treasured? How many toys are played with for a few days and then are tossed to the side? How many of the sweaters and ties are pushed to the back of the closet – seldom used.
The bottom line is that many of our holiday purchases are not items with real value.
Consider that if some of your holiday gifting budget were to be spent on something with real, sound value for your family – something that would protect your children and spouse. Then estate planning at this time of the year makes a lot of sense.
Get a jump on your New Year’s Resolutions. Move estate planning to the top of the list. For a real value – for true peace of mind – for protection and security for your loved ones.

Do Your Parents Have an Estate Plan?

This is a very difficult topic.  Some families discuss financial and medical issues with ease.  Many don’t.  If your parents are the ones that don’t, it is still important to get the ball rolling.

First of all, if there is more than one child, this should be done in a family context.  It is not a good idea for one child to approach his or her parents alone.  It can be perceived by other siblings as lobbying for favors.  It can be seen by parents as one child being greedy.  The best way to do this is by all of the siblings being present during discussions such as these.

It might be good to start with the topic of medical directives, since this does not deal with money.  Ask your parents if they have medical directives or power of attorneys in place.  If they don’t, you might want to encourage them to do so by letting them know that if they were to get sick and unable to speak for themselves, the current regulations would not permit the hospital to speak with the children concerning any medical information.  Since it is a good idea for every member of the family to do this, it could be a good family project for all members to take the time to do medical directives and appoint patient advocates.  In that way, your parents may not feel as if they are the target of an unpleasant conversation.

Next, gently approach them about the issue of Wills and Trusts.  If one of the children has already taken that step, it might be a good idea for him or her to lead off the discussion by pointing out that he/she had already taken care of that.  Talk about what a relief it is to know that all your affairs are in order.  Additionally, you might want to raise the issue of how much difficulty a friend had when his or her parents did not have any planning in place.

Once you get the ball rolling, try to make sure that your parents address all of the following issues and discuss them with all of you.

 

  1. Should they prepare a Will or a Trust? What would best meet their needs?

 

  1. Have they checked their beneficiary designations on all of their life insurance and IRA’s or 401K’s? Are they correct?

 

  1. Who should they chose as agents under their documents? Are some of you less willing than others to assume that responsibility?

 

  1. How should their personal property be distributed? Perhaps it would be appropriate for each of you to list several things that you really would like to have.  That would give them a starting point for a distribution list.

 

  1. How would they like to spend their golden years? What are their goals?  What are their concerns?  Do they worry about having the financial assets available to live out the rest of their lives in comfort?

 

  1. Do they have long term care insurance? If they don’t, what would a plan be if they were to need skilled nursing care?  They may believe that they can take care of one another, yet that may not be a practical plan.  Who will care for the survivor when he or she is not able to care for him or herself?

 

  1. When do they plan on downsizing their living? Would they consider selling their home and moving into something smaller and easier to care for?  Would they object to assisted living when the time comes?

 

  1. How would they feel comfortable deciding when they could no longer handle their own financial affairs? Would it be upon the recommendation of a doctor? Or two doctors?

 

  1. Where are all of the documents kept? Are they all in one place?  This is important not only at the end of life, but in the event of a medical emergency.

 

If this is approached in an open and friendly manner, the discussion can benefit not only your parents, but all of the children as well.  You will learn about your parents’ goals and wishes.  They will be comfortable knowing that you understand these goals and desires.

Should you name your parents as beneficiaries?

For most people, this idea might seem unusual.  After all, in the general scheme of things, parents will die first.

For individuals with minor children, this should not be a strong consideration as the primary focus of your estate plan is to provide for your children in the event that you are no longer here to care for them.

For people whose children have grown, or for individuals without children, this issue may deserve a stronger consideration depending on family dynamics and economics.

If your parents are individuals without significant assets and are “getting by” on their social security and a small savings, they may run out of assets in the event of a lengthy medical event.  Additionally, while those without assets can apply for Medicaid for Nursing Home costs, that doesn’t hold true if an elderly parent needs assisted living.

If the time comes that your parents can no longer live independently at home, but are not eligible or appropriate for a skilled nursing home care, they may require assisted living.  The problem is that this is a pay as you go system.  What if they do not have the resources to afford assisted living?

If all of their children are alive and doing well, the children may decide to assist their parents financially by each contributing a monthly amount, thereby permitting the parents to live in assisted living.  What happens, however, if you are contributing to your parents’ assisted living costs and your predecease them?  Or perhaps, they are not yet at the point of needing assisted living, but could very well require it in the future.  If you die first, they will not have the support they may need when the time comes.

This could be a good reason to include your parents as beneficiaries in your trust.  The money could be structured so that it would include assisted living expenses during their lifetimes; however, the money if not used during their lifetimes would then flow to other beneficiaries.

This is a concept which should be discussed at a family meeting of all the siblings.  The key is that with proper planning, your parents’ needs will be met while you are also addressing the needs of your own family.

What to do when someone dies

Most people are in a state of confusion when a death occurs.  What should they do?  First, second, and so on.

 

Things for the family to do:

  1. Evaluate the emotional effect of the death on the surviving spouse, children or close relatives.
  2. If necessary, decide on procedures to care for dependent children and surviving spouse, if incapacitated.
  3. Evaluate the need for security at decedent’s residence and personal property.
    • Cancel home deliveries
    • Notify post office to hold mail.
  4. Decide on funeral arrangements
    • Contact clergy
    • Discuss donation of bodily organs to an organ bank.
    • Arrange for mortuary and burial or cremation.
    • Prepare obituary for publication.
  5. Consult the family lawyer or the lawyer the family wants to retain as either a legal counselor or as probate lawyer to handle the estate’s legal and tax matters.
  6. Evaluate the survivor’s cash needs for the next three (3) months.
  7. Evaluate the existence of and need to care for or sell perishable property.
  8. Keep records of all payments for funeral and other expenses
  9. Locate original Will and/ or Trust.
  10. Locate safe-deposit box.
  11. Locate life insurance policies.
  12. Meet with the lawyer you have selected
  13. Go to the safe-deposit box with the key. At least two bank officers will be at the box opening.
    • Open the box
    • List all contents in detail on letter size paper or on a form provided by the bank.
    • Have all personals sign at the bottom of the list and date.
    • Put contracts back, except for will, life insurance policies and Trust.
    • If there is any danger of a Will contest or a conflict of interest between personal representative, family members or beneficiaries, do not go to the safe-deposit box without an attorney.
  14. Investigate:
    • Social security benefits
    • Life insurance collection
    • Union death benefits
    • Veterans burial allowance
    • Veterans benefits
    • Employee payroll benefits including:
      • Accrued vacation pay
      • Employee death benefit
      • Final wages
      • Ira Accounts
      • Retirement plan death benefits
      • Deferred compensation
    • Medical reimbursements to help pay for hospital and doctor bills.
    • Refunds on insurance or canceled subscriptions or any refunds.
  15. Check for Keogh plan/ IRA accounts
  16. Meet with C.P.A. as to tax and financial planning issues
  17. Get death certificates, usually from funeral director. Depending on the situation, may need as many as 10 – 12.
  18. Meet with life insurance agent to collect proceeds or consider payment options.
  19. Notify liability insurance agent about fire, theft and public liability insurance on decedent’s assets.
  20. Do not pay any of decedent’s debts until the lawyer you have selected discusses them with family members or with the duly appointed personal representative.