Estate planning involves creating a comprehensive plan that encompasses end-of-life financial and health care directives as well as tools for asset distribution and management after death. As an adult child of elderly parents, facing the reality of your parents' eventual death can be difficult and painful.
No one necessarily wants to talk about issues that involve death, and yet, avoiding the topic can lead to big trouble for you as a family member after your parents pass away. Lack of proper estate planning can lead to many unnecessary and costly expenses as well as bureaucratic and legal hassles and conflicts. The best way to avoid this confusion and difficulty is to start the estate planning conversation well before your parents age to the point of incapacitation or death.
Starting the estate planning conversation
One thing that many adult children struggle with is how to broach the topic of estate planning with their elderly parents. Privacy about finances is usually a big concern, as is the general taboo and discomfort surrounding the topic of death. A good way to start the conversation is to set it in a neutral location that feels safe and calm for everyone involved.
An important factor is to bring the topic up when there are no current crises taking place in the family, so the focus can be solely on the topic of estate planning and asset distribution, rather than mixed up with other critical issues. It may never seem like an ideal time, so the sooner you can address the issue, the better.
Critical components of a comprehensive plan
Ensure that you address some of the most critical and basic components of a comprehensive estate plan, regardless of your parents' personal wealth. One topic to talk about is that of wills and trusts. You and your parents should know the difference between these two tools and understand the role each may play in the estate plan. Other things to discuss include how to strategically dispose of wealth prior to death, for example through gifting strategies, as well as advance directives for finances and health care decisions. A power of attorney may play an important role as well.
Do not procrastinate in talking to your elderly parents about proper estate planning. Although it may be an uncomfortable conversation to start, you will all have much more peace of mind once the issues are out on the table and resolved before it is too late.