Talking with a parent about their estate planning is never easy, but it is a crucial conversation. Less than a week ago I met with a young woman in Statesville whose father passed on without any estate plan. Unfortunately, she received an inheritance of about $60,000 that made her ineligible to receive her social security disability benefits and unless she spent the money down to under $2,000 by today she also would be removed from the Medicaid program and have to pay for her extremely expensive medicine out of pocket. She would then have to go through the whole Medicaid application process again. If the father had simply put her inheritance into a special needs trust, she would have had that money available to supplement the things Medicaid and social security didn’t handle.
Not having any plan is planning for a family fight over what the family thinks is best for the parents… and it leaves parents with no choice at all. Or at least it is putting the state government in charge of deciding who receives the parent’s assets and who makes decisions during a medical crisis. Everyone needs some kind of plan in place.
Here are some different ways to broach the estate planning topic with your parents
1: Get your own estate plan done. Then talk about the details of your planning with your parents. If they are included in your plans, let them know, but more common in estate planning is the protection of spouses, partners and children, and after that nieces and nephews. If your parents are not receiving an inheritance, discuss this with them and the reasons why you were not including them. No one knows when they are going to pass on, but most people assume that their parents will go before they do. That isn’t always the case. The reason why this helps broach the subject is because you are discussing your plans first, and it looks a lot less like you are trying to find out what money your parents are leaving you. Besides, what credibility to people have when they recommend doing something that they have not bothered to do themselves?
2: Discuss Health Care Options: In many families, the subject of long term care and nursing homes is extraordinarily difficult, but it should be discussed. Again, broaching this subject by talking about what you want to have happen with you if you become incapacitated takes the focus off your parents for the moment. Who are your health care power of attorney agents? If your parents aren’t on the list, explain to them why. If you have a sibling who is or is not one of the agents in line to make healthcare decisions for you, discuss this with them also. Within this conversation, be sure to broach the subject of life support and artificial nutrition/hydration. In the Terry Schiavo case from Florida, there was a 15 year battle between Terry’s spouse and her parents over whether or not to withdraw a feeding tube. Tell them you are having your own wishes put into a living will and you wanted to explain to them the reason for your decisions so if the time ever came there would be no fighting. Once again, this leads into you asking your parents what plans they have made and what their wishes are.
3: Discuss Younger Beneficiaries: Again, in your own estate planning, one of the questions a good estate planning attorney will ask is “At what age do you want younger beneficiaries to receive an inheritance?” Most of my clients look at a minimum age of 25 or even 30 before they give anything outright to a child or grandchild and before that leave it in the hands of a trustee. Even an inheritance of $10,000 to an eighteen year old will tend to do more harm than good, but 18 is still the legal age of inheritance. If you discuss your own estate planning wishes with your parents and bring up the age limits you want to impose on your beneficiaries, then it is a short step to asking if they intend to leave anything directly to your children and whether or not they have put age limits on the inheritance.
While I have highlighted three distinct conversation areas, they all relate back to first getting your own plan in place. In the 16+ years of doing estate planning, I have seen and heard quite a bit. If aging parents have not already done a proper, legally sound estate plan and discussed it with you, then no matter what words you, use coming right out and asking about their plans will always sound like “what are you leaving to me?” or “you’re putting me in charge, right?”
For free general information on life and estate planning, you can visit one of our online educational sites at www.raleightrusts.com and get access to a free audio program and several e-mails on different life and estate planning topics.