Talking with Your Parents About Estate Planning

If your parents were born in the baby boomer period, it is very likely that they are approaching that time of life where retirement is setting in; perhaps along with numerous health problems that come with time and aging. As adult children, it is important to realize the necessity of having "the talk" with your parents sooner than later. While we can never know how long we will be alive here on earth, the older people get the more of a chance that their time will come. Because of this, addressing the taboo topic of estate planning with your parents just may be the conversation you need to have. Why is it considered a difficult conversation to have? For a few reasons including bringing up the topic of their future death, discussing their personal finances, and asking them to make important decisions.

Estate planning can be a more uncomfortable conversation for parents and their adult children to have; however, it is important if the parents plan to have their way with their finances after they die. The topics that need to be discussed include eldercare, retirement planning, inheritance, property, etc. Unfortunately, many adult children don't realize the need to bring up these matters with their parents, as 1 in 2 still have not had this talk with the parents in light the very real fact that they are getting older. What can make this topic much more difficult to discuss is that with every generation, new views on money matters arise. Perhaps to generation may view the need of estate planning altogether differently than our parents.

Why is this topic so important, then? Apart from the obvious answer of having their assets in order to help the family, another common issue is that if it is not addressed assumptions can be made; and in many cases they are wrong and can lead to tension in the family. Many times a parent will assume a situation about the children, and the kids will assume they have rights to more than they actually do, etc. This can lead to not only confusion and tension, but also final decisions that are made in the end that may not be as beneficial for the family in the long run. This is why communication in life is so essential, especially in the family.

Wrong assumptions that can be made include a parent assuming their children are fine in the area of finances and therefore deprive them of assets that may help their family. On the flip side, often children will assume the parents want them to pay for their eldercare and retirement home stay, when in reality the parents don't expect that at all. As with many things in life, we tend to overestimate the value of things. In many cases, children will over estimate the value of their parent's properties and assets and then make plans for money that doesn't exist. These studies show that in many cases the number is off by at least $100,000.

While there may be no opportune moment for this discussion, the sooner the better for both of your sakes. Start asking the important questions because you never know when life may throw you a surprise. During this conversation make sure you address: insurance policies, pensions, retirement accounts, beneficiaries, power of attorney, wills and trusts, as well as the end of life decisions (about how they want to die). Having these conversations early on can help you and your parents rest assured that the future is cared for at least in the area of estate planning. Contact your trusted probate attorney today for more information on getting this process started.