I am often asked “How can I talk to my parents about their estate plan without seeming like a gold-digger, control freak or eager for them to be gone?”
Well, the short answer is… it’s difficult.
Many people feel their estate plans are very personal and they don’t want to talk about it. And that’s OK. They are not obligated to tell you anything about their planning at all.
Some families don’t like to disclose financial information, or what assets are owned, or how much debt there is.
An estate plan is a very private and touchy subject in some families, where as other families are very open about these things. There’s also another aspect to your parents’ willingness to discuss things with you, and that is them not wanting to play favourites. They may not want to single out one of their children as the most responsible, or least trustworthy, or anything else. Your parents may want to keep their opinions of each of their children private.
However, there are aspects of our parents’ planning that are important to inquire about as they do affect you and your family directly. If you have more information or advice than they have been given which would make things better for you, then you should let them know.
You could ask your parents some of the following questions, without them revealing more than they are comfortable with sharing:
Have they done their estate planning?
Even this question can be difficult to ask, because your parents may feel like you have an ulterior motive in asking this question.
It might be easier to frame this question by asking “Have you prepared Powers of Attorney as well as Wills?”. Or you could lead by example and bring it up because you have just completed your own estate planning.
It’s important to make sure that they’ve completed Wills as well as made plans for their aging and eventual declining health – what happens if they become incapacitated? It’s also important to ascertain that they haven’t cheaped-out on their plan to the point that it won’t work.
If it’s been more than five years since they’ve last reviewed their estate pan with their lawyer, you should suggest that they make an appointment to review it with their solicitor – to make sure that it still works the way they want it too, and see if circumstances have changed. Laws also change regularly, and this year there are a couple of major changes in Victorian law. An estate plan is not a set-and-forget endeavour. It’s something to review every five years or so, to make sure it still works.
Am I or one of my siblings serving as an attorney or executor in your plan?
Feelings can get hurt when one adult child is serving and others are left out, sometimes bringing to the surface long dormant rivalries.
Be mature yourself, and remember if you haven’t been appointed in a role that your parents probably had a difficult choice about who to use and who to exclude.
If there are serious rivalries that you are aware of, that your parents aren’t aware of or that they minimise, you might want to suggest that it be taken out of everyone’s hands and given to a professional to save arguments and litigation.
Make sure that your parents have told any other siblings that they have been appointed in a role, and what their role is. Suggest to your parents that it would be helpful to you (if you have a role), and your siblings, to meet with their solicitor to learn what their obligations are in each role.
If I am inheriting something, is it protected from my creditors?
If you are in business, it may be preferable for you not to receive your inheritance directly, but for it to be held in a trust for you. Equally, if you are worried about your relationship breaking down, or just don’t want your spouse to have any access to your inheritance, you will want to receive your inheritance into a well set up trust.
Some parents will want to make sure their hard-earned savings and assets are maximised for you.
Other parents might want their children to suffer the consequences of their actions, and don’t mind if their inheritance is lost due to poor financial decisions. Whichever way your parents decide, it will be good for you to know.
Asking this question could also prompt your parents to say they don’t know, which means they should go back and see their solicitor again. They may not have explored these options with their solicitor, or have known it was important to you.
Will my children inherit anything?
Your parents may want to leave a legacy to your children, or they may want to skip a generation.
Either way, it would be good to know, and to make sure that their plan doesn’t undercut your authority with your children. Discuss with your parents what age your children should inherit, and who should be in charge of its control in the meantime.
What are your wishes and plans if you need long term care?
We are living longer and longer, and our bodies are often out-living our minds.
Have your parents set aside enough resources to pay for their care? Remember, our parents may need every last cent they have to support their lives until their last breath.
You should have the discussion with them and the family home may need to be sold to pay for this, and they shouldn’t expect that the home will be kept in the family.
Their wishes as to how they should be cared for, and what treatment they want to receive in certain situations should be recorded. It is better to have a record of what they want, rather than wondering once it’s too late. An Advanced Healthcare Directive or a similar document should be part of their estate plan, along with the appointment of a medical attorney.
Here’s the best advice: Expect nothing and you won’t be disappointed.
Have you had this discussion with your parents? How did it go?