How to Talk to Your Aging Parents About Their Estate Plan Compassionately
Aging is an inevitable part of life. While no child wants to think about their parents' demise, it is a topic that you'll need to broach eventually. Talking about an estate plan with aging parents is never easy, and you'll want to be as compassionate as possible.
Parents can be sensitive about their estate plan, and some parents may assume you're only after their money.
It's important to start the conversation off slowly and explain that an estate plan allows your parents to determine how their estate will be administered.
Start with the Basics First and Then Move into More Sensitive Topics
Children, if no other spouse exists, will likely be required to make important decisions (both financial and medical) as their parent’s age. Eventually, they may be called upon to administer the estate in most cases. It's important to ask your parents for key documents that can make these processes easier and streamline the process.
If your parents have been putting off their estate plan, explain that:
- An estate plan protects you and your siblings when your parents die
- An estate plan can be incredibly empowering (who do they want to make decisions if mom/dad need help or are unable to make these decisions themselves?)
- An estate plan takes guesswork and conflict out of the equation - isn’t it better to get wishes written down now so there is no fighting later?
- Planning today can save significant money for the estate
"Since probate proceedings can take up to a year or two, the assets are typically 'frozen' until the courts decide on the distribution of the property. Probate can easily cost from 3% to 7% or more of the total estate value," explains Investopedia.
Documents to Request from Aging Parents
You should start the conversation off lightly. Ask your parents if they have an estate plan in place. If they do, you'll want to ask for:
- Life insurance policies
- Titles to assets
- Birth certificates
- Social security cards
- Credit card information
- Bank account information
- Advanced care directives
- Trust information
- Digital account username and passwords
Ask your parents to keep all of these documents in one file or folder so that you have quick access to them if the worst happens.
If your parents don't have an estate plan, they're part of the over 50% of Americans without an estate plan in place. Explain to your parents how an estate plan will save money in the long-term and how they've worked hard to build their estate.
Having no plan puts their medical wishes, asset distribution, and end of life care in the hands of someone else.
Asking Hard Questions in the Most Compassionate Way Possible
Asking for a will is a lot easier than asking about incapacity and medical wishes. You'll want to ask your parents about the following:
- DNR: Do Not Resuscitate Orders, also known as a DNR, is a document asking that the person not be revived if their heart stops. A DNR is often in place when a person is sick and wants to avoid being brought back to life. The DNR may be included in a person's living will.
- Durable Power of Attorney / Health Care Advanced Directives: If your parents can no longer make decisions on their own, a durable power of attorney for health care allows another person to make medical decisions on your parent's behalf.
- Living Will: A living will is a legal document that provides instructions to medical personnel and doctors of the type of treatment your parents prefer. These wills can be very specific in nature.
These difficult questions are best asked to your parents as early as possible. If your parent was diagnosed with a life-ending illness, asking when they just received the news may not go over well. Your parents' emotions will be high at this time, so allow time to pass or ask them these hard questions while they're still healthy.
Oftentimes, there's no perfect time to ask these questions.
Discuss Planning for Future Long-term Care If Necessary
If your parents have medical issues that require them to be in long-term care, how will these expenses be paid? In the ideal world, children are able to care for their parents, but when you don't have medical training and have a job, it can be extremely difficult to meet the medical needs of your parents.
Statistically speaking, 70% of seniors will need some form of long-term care.
Nursing homes cost an average of $9,500 a month in Florida (monthly rates are more like $10,000 - $12,000 per month in South Florida).
Ask your parents:
- Their wishes for care
- If they have long-term care insurance
- What, if any, costs health insurance will cover
- If any money has been put aside for medical costs
Smart Medicaid planning can help. Medicaid pays for most long-term care in the United States, but there are certain limitations in place. Medicaid is meant to be your "last resort." Medicaid planning can be incredibly valuable, but its also a minefield (read some common Florida Medicaid Planning Mistakes, here). For this reason, an elder care attorney who specializes in both estate planning and Medicaid planning can help.
Retitling assets is possible if both of your parents are alive.
Asset transfers are possible without a penalty and won't impact your eligibility. An attorney or accountant will be able to help your parents begin planning for Medicaid eligibility for their long-term care requirements.
Bring an estate plan up to your parents at the right time and try to involve the entire family when possible. If siblings are left out of the discussion, they'll often feel that you were granted more assets because you guided the conversation.
If your aging parents need help with their estate plan, or long-term care planning, contact us to speak to an elder law attorney today.