Beware of Unwanted Solicitation on Your Property ProfileOctober 19, 2017
Updating Your TrustJanuary 15, 2018
How to talk to your parents about their estate
They want what is best for you, but are they prepared? How do you talk to your parents about their estate planning?
Many of us travel home for the holidays to see our loved ones. Our brief break from our busy life is just what we need to spend time with people who are really important to us. But, are the holidays an appropriate time to talk to your parents about their estate planning? It’s family time. Maybe it’s the best time. “Nothing like the present,” as my mum would say. We don’t know when the next time will be that we have a chance to have that heart-to-heart chat. Even a local attorney who has been practicing estate planning law for over 40 years said this to me: “Probate is only for people who don’t plan ahead.” I wrote this down because I took it to heart and I never want to forget it. Sadly, this is the reason why estates end up in probate court.
What your parents have or have not planned in regards to their estate planning will determine if your inheritance is derailed and headed to probate. I regret not asking my father about what his plans were for his estate before his passing. In my story, I briefly explained the reason why it’s a good idea to have this conversation with our parents. So, this is the tough part. How do you talk to them and when is the best time? Also, what questions should be asked? If you do not know if they have estate planning documents in place to avoid probate, then it may be time to ask.
When is the best time?
Signs of the Times:
Are your parents forgetting simple things or seem to be tired or overwhelmed by life? When they are noticeably slowing down, then it’s time to chat. There may be early signs of dementia or we may just overlook it as anxiety or we may just simply not have the time to recognize our parents need help. It’s a good idea to ask these questions and make sure our parents have the right documents in place BEFORE it’s too late. When your parent is diagnosed with dementia or Alzheimer’s or suffers a stroke and can no longer understand what you are asking or worse, it is too late. This is why it is so important to talk to your parents about their estate.
What do you ask?
Below are a few suggested questions that you might consider asking your mom and/or dad.
- Do you and (dad/mom) have a trust?
- Have you ever created a last will?
- Do you have an Advanced Healthcare Directive or Power of Attorney for Healthcare in place?
- Is there a Power of Attorney for healthcare set up in case one of us (the kids) need to talk to the doctor when you can’t?
- Do you have a Durable Power of Attorney so that one of us (the kids) can help you with financial matters.
If they answer “no” to any of the above questions, then there is still time to get prepared.
- Creating a Living Trust clearly sets forth in writing the beneficiaries to receive property and avoids probate, if properly funded.
- A Last Will and Testament can name beneficiaries of an estate, appoint a legal guardian for minor children, and appoint a conservator of the person.
- Durable Power of Attorney appoints an agent when our parents can no longer make decisions regarding their money that would be in their best interests.
- Advanced Healthcare Directive appoints an agent for our parents when they can no longer make decisions regarding their healthcare.
The risks of not having the right documents in place:
- If real estate is not vested in a trust, the property will go to probate court; the value of the property will dictate which probate procedure is required.
- A probate proceeding will need to be opened in each state where real estate is located. This could double or triple the cost based on the number of properties in other states.
- Probate could cost the estate thousands of dollars in attorney’s fees.
- It can take up to a year before property is distributed to heirs and beneficiaries when in probate.
- Probate fees and other costs will reduce the amount received in inheritance.
- No Power of Attorney? Then, you may need to file a Conservatorship petition with the probate court to help your parents with their needs.
As I have written in other articles, a Living Trust will avoid probate, on real estate and other types of property. Specific steps must be taken in order to ensure that your property doesn’t go through probate.
So, consider that talk to your parents about their estate with your mom and/or dad this week. It will only cost you more if you don’t. Share this article with your family this week or the next time you have an opportunity to ask your parents if they are prepared.
If you or your parents need these important estate planning documents, call us.