Preserving Family Relationships
If you are a member of that in-between generation, you have both kids to take care of and aging parents to worry about, I encourage you to talk to your parents now, while they still have the ability to prepare for their own incapacity and death. The following suggestions are based on actual situations from clients who did not have a chance to talk with their parents about estate planning until it was too late and therefore very difficult on the entire surviving family. Here are a few Estate Planning considertions:
- Make sure you know where your parents’ estate planning documents are located;
- Check to see that their documents include all the necessary components of a complete estate plan;
- Make sure their documents are all signed, witnessed and notarized, as required.
- Make sure their planning documents reflect your parents’ current thinking. Wills and trusts need to be reconsidered if something has changed in the time since they were drafted. A very common change is remarriage. If your parent has remarried but the will was written before the wedding and makes no mention of the new spouse, the estate plan could be derailed;
- Be sure the documents are current. Often testamentary documents are out dated. Presumably they are still valid. However, to be on the safe side, other documents that require the cooperation of third persons for their effectiveness should be redone every few years. I have heard of many people having difficulty getting a bank to honor a Durable Power of Attorney (DPOA) that is more than five or so years old. If the DPOA is not honored, you may have to be appointed conservator in order to take care of your parent’s affairs in the event of incapacity. That is an extremely expensive and time-consuming process;
- If your parents have a revocable trust, check to see that their assets have been funded into the trust. Often, especially if the trust was a do-it-yourself project, will not be funded which defeats the purpose of having the trust in the first place. Even where the trust may have been funded when executed, if your parents have refinanced their home they may have “removed” it from the trust. In that case be sure their trust was “refunded.”
Death may be unavoidable, certainly unpredictable, but it is not unforeseeable. Your parents need to know that preparing for the reality of death means getting your wills, trusts, and estate plan in order so their loved ones don't have to be making decisions for them that you should have made for themselves. Their indecision can lead to family fueds. There is more to estate planning than transferring wealth, minimizing taxes or protecting assets from creditors - It's about protecting family relationships.
