The mere idea of having a talk with our elderly parents about their finances and estate planning is enough to make most of us run in the opposite direction. Won’t they think we’re just making a grab for their cash or invading their privacy? As painful as such a conversation might be, such communication is often the key to helping ensure that our parents live out their lives without money worries, and that their estate planning wishes are followed and carried out.
Bringing up the future with your parents — their finances, estate matters, memorial wishes — is one of the best things you can do for them and for you. The earlier you can do it, the better off you will be. Here are 12 key questions we need to ask your parents to make sure that their estate planning is in order:
- Who’s on their team?
If your parents work with financial and legal professionals, ask for a list of their names, addresses and phone numbers (or make sure you know where to find that list if you need it). You may need to involve their attorney, accountant and financial planner in estate matters. Also key: names and numbers of your parents’ doctors, in case end-of-life medical decisions need to be made.
- Do they have Wills?
If they don’t, it’s unlikely that they have much else in the way of estate planning documents. If they do,here’s what you need to know: how recently were their Wills written, who will be the executor and here are the original documents located. If their wills are more than five years old, it’s probably a good idea to review them to make sure that their current wishes are still being represented.
- Do they have advance directives (Living Wills) and Powers of Attorney?
If so, ask to see them so you know what their respective feelings are about life support and who they have elected to manage their financial and medical affairs if they become unable to do so themselves.
- Are their beneficiaries up to date?
Designated beneficiaries on insurance policies, pensions and investments trump any instructions your parents may have made in their Wills. Make sure your parents have updated their beneficiary designations to reflect their current wishes.
- What financial and investment accounts do they have — and where are they located?
Have your parents draw up (with your help, if they prefer) a list of their bank, brokerage and mutual fund accounts and the account numbers. If they have any user names and passwords on the accounts, get those too. If they’re uncomfortable doing this, have them put all the relevant info in a notebook, so you will have the essentials when you need them.
- What insurance do they have and where are the policies located?
If one or both of your parents become incapacited, you’ll need to know about their health insurance — private or Medicare. Also locate their life insurance, auto, homeowners, disability and long-term-care policies, so you know what their coverage may be and whom to contact if necessary.
- Where is their financial paperwork?
You’ll want to know where to find the title to your parents’ house and car, their property deed, and all of their loan documents.
- Where are their tax files?
If you find yourself handling an estate that gets complicated, you may need your parents’ previous years’ returns.
- When and where would they consider moving if necessary? Explore whether your parents have thought about what they’ll do when they can no longer climb stairs or take care of a big place. Would they want in-home care? Would they prefer moving to an assisted-living facility, and if so, to any one in particular? If your parents plan to stay put, you’ll need to talk about whether the house is built for senior living and, if not, how to retrofit it.
- How do they envision their memorial services?
You’ll want to know what kind of funeral they have in mind, assuming they want one, and where they want to be buried or cremated. You might find out that 35 years ago they bought burial plots and you never even knew it.
- Are they an organ donors?
So, you’ll also want to know where they keep their organ-donor designations. In some states it may be indicated on a their driver licenses, but in others they may have organ donor cards.
- Do they have a safe-deposit box and, if so, where is it located and where do they keep the key?
If you’re the executor of your parents’ estate, you may be able to get into the box without a key, but it’ll probably involve a drill and a substantial fee. these kind of questions is easy, but not asking them can be far worse. Try explaining to your that you are not trying to invade their privacy or interfere with their personal business, you are simply trying to provide both them and yourself peace of mind.
Have this conversation with your parents today. In the long run, you'll be glad you did!