Attorney & Mediator
Attorney & Mediator

ESTATE PLANNING: Should You Leave Money for Mom and Dad?

Initially, this may strike you as a strange suggestion.  After all, in the usual course of events, our parents die before we do.  We inherit from them, not the other way around.

Also complicating this is the fact that many of us have spouses and children that we would leave our estates for.  So, why consider leaving money to our parents?

Many older people are financially set.  They have a good income from Social Security, pensions and investments.  They have planned carefully and will be able as they move forward to rely upon themselves for their financial well-being.

Other elderly people are not so fortunate.  Times have changed, and they didn’t plan for the changes that would come.  They may have thought that if they owned their home (mortgage paid off) and they had no debt, they could manage on Social Security alone.  They may have only a few thousand in the bank for the rainy-day emergency.

As your parents age, will they be looking to you for assistance?  If they cannot live alone, can they afford assisted care?  Or would they anticipate moving in with you?  What would they do if you were to pass away?

In large families, there may be other siblings to shoulder the responsibility.  If there are fewer, or if you are an only child, there may be no one to assist them.  This may be a reason to include them in your estate planning.  If you can afford to do so, you may wish to leave them money if they are still alive at the time of your death.  This could provide the cushion they would need to make it through.

This is not a planning idea that is for everyone or for every family.  It is a consideration when you are doing your planning.  Who would help Mom and Dad if you were not here?

ESTATE PLANNING – Leave a trail of breadcrumbs

The most important thing that you can do to assist your loved ones in the event of incapacity or death is not having your estate plan documents in order (which is very necessary) but instead is getting organized and leaving the information in a place and in a manner that can be used when the time comes.

A Durable Power of Attorney will not be very effective is assisting you during incapacity if no one know where your assets are or what bills need to be paid.

Your Will or Trust will be difficult to administer if your Personal Representative or Trustee cannot find the assets.

Leave a trail of breadcrumbs!  In other words, get organized and let them know where the information is.

What do you need to do?

Financial:

Make a listing of all financial accounts, with institution and account number.

Streamline bill paying by setting up automatic payments wherever possible.

Leave the contact information for any financial advisors, attorneys, and accountants.

Legal

Update your beneficiary designations.

Make a listing of all insurance policies, including medical and long-term care.

Update your estate planning documents so that they are current and relevant.  Leave them in a location that is known to your family.

Medical:

Make a list of all doctors and medications you are currently taking

Have a medical directive and discuss your wishes with your family

Bills

Make a listing of all bills, the account numbers, passwords, usernames, etc., and how they are paid: automatic withdrawal from checking, or from savings?  Automatic billing to a credit card?