Discussing Planning and Finances with Loved Ones

     Discussing estate planning with clients can be particularly challenging, as people are frequently reluctant to contemplate their death or to discuss the state of their personal finances. This discussion likely is more difficult when it occurs between an aging parent and their adult child. As parents age it, becomes more and more important for adult children to understand the state of their parents’ planning or lack thereof. While such discussions may be difficult, they can be the difference between a smooth estate administration and months of problems in a probate court.

     Discussing estate planning is much more than simply learning whether a Will or Trust exists. This does not mean that parents need to share those documents with their adult children, but it is advisable that adult children know the location of the documents, who is designated to handle their parents’ affairs, and contact information for their parents’ attorneys and advisors. It is also important for adult children to know if their parents have other documents to address lifetime issues, such as Durable Powers of Attorney, Patient Advocate Designations, and Living Wills. This knowledge sets the stage for a larger discussion of the parents' finances. This discussion is important because an organized list of assets, income, and expenses allows the people named under powers of attorney or designated to administer the estate to handle the parents’ finances efficiently. As with the discussion of estate planning, this discussion does not need to include a complete disclosure of the parents’ finances. It should at a minimum result in the parent preparing a list of information that includes:

• Information on all bank and investment accounts
• Information on all sources of income, including annuities, IRA, retirement accounts, and Social Security
• Information on all regular expenses, including utility bills, mortgages, car payments, regular donations
• Contact information for financial advisors, insurance agents, and attorneys

As with the estate planning information, the parents’ should keep this list of financial information where it is readily accessible and the location known to those people designated to make decisions or administer the estate.

     Having a discussion with parents and other loved ones regarding the state of their planning, their finances, and organization is never easy, but the information gained from such a discussion makes all the difference when it comes time to administer an estate or make decisions on behalf of a loved one. It is all too common for client to meet with us to prepare an estate plan after experiencing the results of handling a parent’s estate without a plan. It is important for clients to share this information with their loved ones after executing documents and to address these issues with their parents to avoid future issues.

Matt Ferrara