Starting the Conversation
So, you want to help your elderly parents set up an estate plan, but you feel unsure about how to start that conversation. You might not even have a clear idea of what to discuss. Below, you’ll find a list of the topics your parents may want to address ahead of time. But first, you have to bring up a topic—see if the following prompts (some more serious than others) give you any ideas:
“Dad, I keep thinking about what will happen to your things after you’re gone. Can we set up a time to talk about it?”
“You’re not giving all of grandma’s jewelry to Tammy when you die, are you?”
“Mom, can I set up a meeting with an attorney so we can get this taken care of?”
“I know it’s not fun to think about, but I want us to be prepared for if your condition doesn’t improve.”
“Remember what the Johnsons went through when their grandma had a stroke? I really don’t want that to happen to us.”
“Dad, just so you know, if you make us go through probate when you die, we’ll all end up hating each other — and you.”
You will know your parents and family well enough to have an idea of what approach will be better received. But more importantly, what topics should you discuss? Read the following questions to see which ones best fit your family estate planning conversation:
- Could assisted living or medical assistance be in your future?
If you have an aging parent with declining health, a family history of dementia, or other reasons why long-term care might be in their future, you can save your parents and the whole family a lot of stress and expense by bringing up elder care planning sooner rather than later.
Why should our family do long-term care planning?
Assisted living, memory care, and other forms of long-term care are more expensive than most of us can afford for long—think $6,000-$9,000 per month. Minnesota’s Medical Assistance program covers expenses for qualifying residents if their assets and income are below certain limits. Without Medicaid asset planning, that assistance doesn’t kick in until most of your parents’ assets have been spent on medical care.
But you and your aging parents can plan ahead and protect their assets. Schedule a consultation with an estate planning attorney who has experience in Medical Assistance planning. It can be a complex field, so work with an expert!
- Do you want to make sure your estate gets distributed a certain way?
Typically, parents want their kids to inherit equal shares of their assets. It sounds simple and neat. But most families, wonderful as they may be, are not simple or neat. For example, what is the fair way to divide an inheritance if:
- One parent has children from a previous (or subsequent) marriage?
- One sibling has five kids and the other has one, or none?
- One sibling lives on a property owned by the parents?
- One sibling is disabled, or deals with mental illness or addiction, or just struggles to manage money?
- One sibling cares for the parents part-time?
- One sibling has received more financial support from the parents than the others?
- One or more children have their heart set on a particular heirloom?
Any of these scenarios can lead to disagreements about what is fair, and if the parents don’t incorporate their wishes into their estate plan, the final result may well be different from their intentions.
Most parents want to make life better for their children. They certainly don’t want their children’s last memories of them to be linked to discord and stress. But those good intentions only count if they result in an estate plan.
- Do you have a current power of attorney or health care directive?
Why should my elderly parents get a power of attorney?
With age comes health challenges that can make a parent’s financial management difficult or impossible. Mom’s eyesight gets too poor for her to drive or read. Dad’s brain fog is getting more frequent. Mom has a stroke. Dad has a fall and spends time in inpatient rehab. Whatever it is, tasks like getting to the bank or paying the utility bill become more difficult than they used to be.
When your parent signs a Power of Attorney, they authorize someone to sign documents on their behalf. The Power of Attorney can give a general authorization, or be limited to certain purposes or a certain time frame. Having one in place can relieve your parents of what might become a significant challenge or a source of bigger problems if bills go unpaid.
Why should my parents get a health care directive?
When a person is unable to make their own health care decisions (e.g., due to a coma or cognitive decline), who decides for them? Health care providers, for good reason, have strict rules about who can even access an individual’s medical records, much less make health care decisions on their behalf. A health care directive authorizes another person to make medical decisions on an individual’s behalf if that individual is incapacitated. If your parent becomes incapacitated without a health care directive, an emotional situation gets complicated by the legal process to identify the appropriate decision-maker.
A health care directive also allows an individual to state their wishes regarding health care and end of life, such as:
- Under what circumstances do they wish to be kept alive
- What degree of medical intervention they want
- Disposition of remains: whether they prefer cremation or burial, and if they would or would not like to donate their organs
- Is your will or trust up to date?
Quick, what were the three biggest events of your personal life 5 years ago? 10 Years ago?
If you’re like me, you won’t have a ready answer. That’s totally normal—a lot of life happens in 5 years. So if your parents set up an estate plan more than a few years ago, it might be time for them to verify that it still represents their wishes. Consider how the following life events could make an estate plan update a wise decision:
- Did a close relative pass away?
- Has any real estate changed hands?
- Have any family members had significant life changes?
- Have finances changed significantly, as in an inheritance or business downturn?
- Have changes in inheritance or tax law made your older documents faulty in some way?
If so, procrastinating on that family estate planning conversation can have unfortunate consequences: a home might need to be probated, or an estranged uncle could be the trustee, or a child’s ex-spouse could get a share of the inheritance, or a tax bill much larger than expected could arrive in the mailbox.
- What happens to the family cabin?
Trust administration attorneys see the same story play out over and over—mom and dad leave the cabin to the kids, thinking it’ll be simple and easy and fair to everyone. And at the time, it sure seems like it! But after mom and dad die, issues about fair use and division of expenses arise. Or a sibling asks to be bought out. Now all the inherited cabin buyout issues arise:
- How will the siblings determine the cabin’s value?
- Where will the money come from to buy out that sibling?
- Who pays for maintenance and renovations until the buyout is finalized?
- How are important decisions about the cabin made equitably in the meantime?
When you mix uncertainty and significant dollar amounts with grief and changing family dynamics, you have all the ingredients for a legal battle among siblings. It’s the last thing mom and dad would want to result from their legacy, and it’s preventable with a thoughtful conversation and an estate plan.
Start the Conversation!
Life feels better when you’re prepared for the future. If any of these topics are in your family’s future, bring them up with your parents so you can be prepared. They’ll thank you, and when the time comes, you’ll thank them.
Reach out to Hellmuth & Johnson’s Trusts & Estates team if you have any questions about estate planning.
