Attorney & Mediator
Attorney & Mediator

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.

Who needs an Estate Plan?

Who needs an estate plan?  Everyone over the age of 18.

Older Individuals: This is more obvious and more individuals over the age of 55 will actually engage in estate planning.  They feel that they now have the assets accumulated that need direction after their death.  Also, as they are older, they believe that the chances of death are greater.

They are right on both counts.  It is important as we age to look at what we have accumulated in the areas of real estate, cash assets and personal property.  Then it is important to plan for the ultimate distribution of these assets upon our death.  For couples, it is important to plan for the comfortable continuation of life for the survivor.

Individuals with minor children: This group often does not engage in estate planning because they may have more debt than assets.  Since they feel they do not have an “estate” they believe that there is no need to plan.

The only place to designate a guardian for their children if they should pass is a Last Will and Testament.  This is more important that who gets grandma’s hutch. 

When an individual has a child, one of the first considerations should be for that child’s future.  Part of the unknown future is what happens if the parents die.  While it is less likely that both parents will die prior to the child(ren) attaining the age of 18, it happens.  Accidents happen – suddenly.

Who would care for your children?  You must name these individuals.

How would they care for your children?  If you do not have sufficient assets to raise your children, you should consider the purchase of sufficient life insurance to provide for care of your children until they are 18 or 21. 

Individuals over 18: This is a group that understandably do not even think about the estate planning process.  However, there are two vitally important documents that each of them need – Durable Power of Attorney and Durable Power for Health Care or Patient Advocate Designation.

The minute a child turns 18, he or she is considered to be an adult.  While still living at home, on his/her parents’ medical insurance, if he/she were injured in an accident or became acutely ill, the parents would be unable to direct any of their child’s medical care.  They would not be permitted to discuss their child’s medical condition with the medical staff at the hospital and would not be permitted to have any access to the medical records or information. 

It is for this reason that every child turning 18 should execute these documents naming his/her parents as the agents and advocates.  This is not taking adult power away from the child, but providing for his/her care and safety.

So the answer to the question, “Who needs an estate plan?” is everyone.  It will take a different form with different documents, be all need a plan. 

What happens to my children if I don’t have a Will?

If something untimely and unanticipated happens to the parents of minor children, what happens next?

The Probate Court must appoint a Guardian and a Conservator for the children that will serve until the children are 18 years old.   This will be done without any guidance from the deceased parents.

A Petition for Appointment of a Guardian will be filed in the Probate Court by an individual wanting to serve in that capacity.  If multiple parties think it should be them, then there will be a hearing in front of the Probate Judge who will then make a decision. 

This is necessary as children must have care givers and people who will serve in a parental capacity to raise them.  It is also unfortunate as the Probate Judge will have little information upon which to make a decision.

The relatives who show up will presumably do so in nice clothes and using nice manners.  They will all “look good”.  The judge will have no idea as to the feelings of the now deceased parents. 

What if she didn’t like the way she was raised?  If her parents were too detached?  Too strict?

What if he doesn’t like the way his brother lives? Too lazy?  Too driven?

In the end, the judge will make the best decision that he or she can make with the information that is presented.

Don’t leave your children’s fate in the hands of a judge who doesn’t know you.  Plan.  Get a Will done and nominate those individuals that you would want to raise your children.