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  • Writer's pictureBrenden Leese, CFP®

Great You Have an Estate Plan; What About Your Parents?

Pen, Last Will and Testament

Key Takeaways

  • On top of leaving your family open to inheritance headaches, many people forget to assign powers of attorney for health and financial matters.

  • Discussing money is uncomfortable for many seniors. However, it's crucial to avoid finding yourself handing a pen to a loved one in a hospital bed signing important documents.

  • Getting estate documents and powers of attorney in order is often less complicated and expensive than you might expect. Get it done today!

Initiating a conversation about death and money is not natural. However, if the conversation is avoided for too long and the wishes are not documented, the outcome could be very undesirable. By choosing to work with a wealth advisor, our clients are demonstrating a desire to be financially responsible. But in some cases, their parents are not. That inaction can lead to headaches, family confusion and potential angst if the parents’ estate plans are not in order before they pass.

During a recent review meeting with a couple, I learned that the husband’s 93-year-old mother - a widow - is still living independently in her longtime home. That’s great, but the husband and his sister do not know much about their mom’s financial situation. They weren’t sure if she could afford long-term care if needed. Both siblings live nearby, but with their own family and work responsibilities, they wouldn’t be equipped to provide round-the-clock care for their mom if needed.

On top of the eldercare worries, if mom doesn’t have her estate documents in order before she passes, the state will decide what happens and the kids’ inheritance could be tied up in probate court for years. And when the estate is finally settled, the kids’ inheritance could be less than if they’d gotten mom’s affairs in order while she was still alive.

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That was the wake-up call they needed. As they told me: “We don’t want her to be in a hospital bed, shoving a pen in her hand, signing off on important documents.” They haven’t retained an estate attorney yet. They are doing everything online with Legal Zoom and Trust & Will. For the most part, the mother’s situation is pretty straightforward. But for another couple in their 60s, the parent’s financial circumstances are more complicated. Two years ago, the wife's father passed away, and her mom – in her 80s – is living on her own in Florida. The wife spent a lot of time going back and forth between New Jersey and Florida helping her mom adjust to widowhood. Now that her dad's gone, the mom must manage on her own.

The wife often tells me how hard it is to discuss money matters with her mom. Like many seniors, their generation was taught that talking about money is taboo. The mom keeps telling the daughter she’ll get around to finalizing her will and estate plan, but she keeps kicking the can down the road. It’s not easy for many of our clients in that “sandwich generation” (simultaneously taking care of kids and elderly parents) to navigate those conversations. More often than you think, elderly parents of our clients don’t have their affairs in order, and it falls to the adult kids to help them out. Again, if the adult kids don’t step up now, they’ll have to deal with an even bigger problem when their parents pass. So, I offered to try and find an attorney in her mom's area of Florida who has relationships with Novi because her situation might be more complex than what you could handle yourself through sites like Legal Zoom or Trust & Will.

Why do we procrastinate on estate planning?

A survey found that two-thirds of Americans don’t have an estate plan, and one-third believe they’re not wealthy enough to need one. Other widely cited reasons for avoidance include not wanting to think about one's own demise and the belief that estate attorneys are prohibitively expensive. Although we understand the rationale, none of those are valid enough reasons. On top of leaving your family open to inheritance headaches, many people forget to assign powers of attorney for health and financial matters.

For instance, who will make financial decisions for the 93-year-old widow if she starts to lose her cognitive ability and there’s no financial power in charge? What happens if she starts writing check after check to various charities and causes with no oversight? Who has the ability to access her records (physical and online) if needed? Who has access to all of her online passwords, including for banking and brokerage accounts?

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So, for our client who doesn’t know where her mom stands financially, it’s hard to plan the next steps for her financial planning and care. It could be a huge financial burden on the kids if they have to help financially or provide hours and hours of care.

The older generation often doesn’t want the kids to worry about them, so they keep procrastinating about getting an estate plan and powers of attorney in order. At some point, the mom has to go get it taken care of, or the kids have to go with the mom to get it taken care of. There are a lot of family dynamics to work through and often the cognitive and/or physical decline is very gradual. There’s often no sense of urgency for the parents (or kids) to get the parents' affairs in order until it’s too late. Again, they don't want to be in a situation in which they're shoving a pen in a parent’s hand asking them to sign important documents from a hospital bed.

At Novi, we create a safe environment to discuss finances, and what it looks like with and without an estate plan. We then collaborate with several excellent estate planners who can get your parents what you need without making things overly complicated. One of the most valuable gifts a parent can give you is a proper estate plan and having all of their affairs in order. It will ensure their health and financial wishes are aligned with their desires. It will also help prevent months or possibly years of headaches in probate court and improve the family dynamics as money is to be transferred to the next generation.

Conclusion If you or a family member has concerns about your family’s or parent’s estate plan reach out any time. I’m happy to assist. Novi is happy to help your parents get the estate plan conversation started and hopefully fulfilled. It’s all part of our holistic, comprehensive planning process.

BRENDEN LEESE, CFP® is an Associate Wealth Advisor at Novi Wealth Partners


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