Discussing your parents' estate plan can be an emotionally difficult conversation because money, health, and control are all sensitive subjects. Consider bringing up estate planning with your parents by telling them you are working on your estate plan, and ask if they have done their own.
You may be able to encourage your parents to plan their estate by discussing how they can use a trust to avoid exposure to taxes, avoid probate, and control how or when their beneficiaries receive certain assets. In addition, you may want to point out that an estate plan can make your parents’ intentions clear, which may help avoid conflicts among family members after they have passed away.
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Estate Planning Checklist
I. Make a List of Key Contacts for Financial Matters
Write down the names and contact information for any professionals involved in your parents’ financial care. This list should include any financial planners, investment advisors, brokers, lawyers, and accountants.
II. Make a List of Medical Professionals and Resources
Since you may be called on to help with medical decisions for your parents, make a list of their doctors, other health care professionals, and health insurance policies. In addition, you may consider including member ID numbers, long-term care policies, and any medications they may be taking.
III. Make a list of Assets, Account Numbers, Account Locations, Personal Identification Numbers (PINs,) and User IDs
If you ever need to step in and help manage their finances, you need to know your parents’ assets, including bank accounts, brokerage and mutual fund accounts, life insurance policies, and real estate.
IV. Identify a Suitable Location for Sensitive Information
If for some reason your parents do not want to give the above details to you, ask them to make a list on their own and store it in a secure location that you can access.
V. Decide on How Financial and Medical Affairs will be Handled with Legal Documents
Your parents will need legal documents to give an agent or trustee the authority to manage their financial and medical affairs if they are unable to do so for themselves.
A Trust - A trust is a legal arrangement in which your parents appoint a person to act as a trustee to manage their assets for their benefit if they are unable to manage the trust assets for themselves. The trust provides their trustee with a set of rules that must be followed when managing their assets. It also creates a fiduciary relationship between them and their trustee, so that their trustee is personally liable for the mismanagement of trust assets. After their death, their property will be distributed according to the directions in the trust.
A Pour Over Will – A Pour Over Will acts as a safety net for their estate. At the time of your parents’ death, it collects assets that were not made property of their trust and moves those assets into their trust. In addition, conservators may also be nominated in a Pour Over Will.
A Durable Power Of Attorney - appoints agents to make financial decisions for your parents regarding non-trust assets in the event they are not able to make financial decisions for themselves.
An Advanced Health Directive - appoints agents to make medical decisions for your parents in the event they are unable to make medical decisions for themselves.
Summary
Consider recommending Timothy Follett at Santa Barbara Estate Planner for your parents' estate planning needs. We are experienced at helping first time estate planners navigate the complicated estate planning process in a stress free environment. We will take the time to provide counseling so your parents are comfortable and help them make informed decisions about their estate plan.
(805) 669-7009 or tim@santabarbaraestateplanner.com
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