You probably didn’t know it as a kid, but if your parents ever sat you down for “the talk”, they were probably dreading the conversation. If you’re a parent now, I’m sure you’re familiar with these vital, yet squirm-worthy topics that you want to have your child hear from you, before it’s too late.
As you are reading this now, you’re also getting to the age in which the roles are reversed–you have an intensely awkward subject you know you need to bring up with your parents, one that you probably would like to put off as long as you can: Money.
More specifically, your parents’ money. That money that may become yours one day. And maybe not.
The topic involves so many social taboos that neither you nor they will want to talk about it. The thought of the shift in the power dynamic alone is likely enough to make them uncomfortable, let alone concerns of mortality that lurk ever present in the shadows. Just remember: It is your business–you are most likely the one(s) who will need to deal with all of the financial issues your parents leave behind in the event of their incapacitation or death.
As always, knowledge puts you on the firmest ground. If your parent’s finances remain a closed book, you are placed at a great disadvantage–an already difficult job will become even more so.
Need a conversation starter? Tara Bernard of the New York Times recently penned a great article on the subject. Here’s her advice on questions to ask yourself:
What do I need to know? There’s more than just the location of the will (important though that may be). Do your parents have executed powers of attorney, advance health care directives, or a trust? What about life insurance and other assets? Where is the policy located? Do they owe debts? Are their bills paid by check or online? Make sure to have a portfolio of their various accounts, along with login information for websites and electronics.
Who can help me out? As mentioned above, your parents will probably be uncomfortable discussing these matters with you. Find out if their attorney or financial planner can be present to facilitate the conversation. Do you have siblings? Depending on your family dynamics, it may be good to bring everyone into the conversation–other times, it may be best left to you. Of course, calling an estate planning attorney with experience of the process from beginning to end can make the entire discussion much easier.
What’s my plan? Many people do not realize the expense of everything that comes in the wake of a parent’s passing–will you have cash on hand or will you need to get access to theirs as soon as possible? Luckily, the legal system does respond to people’s needs: guiding your parents to establish a revocable living trust can allow you to avoid the lengthy probate process entirely.
Where do they keep it all? The important documents need to be kept safe, but accessible. A bank safe deposit box could require a court order to unseal, while all you need for a fireproof safe is the combination. Alternatively, they can bring you on as a signee of the safe deposit box and give you access to the key. Whatever they choose, make sure that there are reliable backups able to access the documents beyond only you.
If you would like to have a talk about estate planning for your family, call our office today at (612) 206-3701 or fill out our contact form to schedule a time for us to sit down and talk.
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