INTERGENERATIONAL ESTATE PLANNING

mother and adult daughter

Should estate planning be a family affair?  We get that question all the time.  Sometimes our clients ask if they should share their estate plans with their children.  Sometimes, adult children ask how they can get their parents to put an estate plan together.  Regardless, the answer is that yes, the estate planning process should involve all of the necessary members of the family to the degree that the parents are comfortable involving the younger generation.

WHAT NEEDS TO BE DISCUSSED?

As many people know, estate planning typically includes executing a Last Will and Testament, financial Power of Attorney, and Advance Medical Directive, and also usually includes figuring out the beneficiary designations and joint ownership arrangements that have been established.  Before a parent can start putting these pieces into place, though, they’ll have a number of decisions to make about what they would want to happen in the event of their disability or death – and many of these decisions would benefit from the input given by the family members who would be most impacted by these life changes.

BEFORE THE CONVERSATION: From the parents’ perspective:

Before parents should sit down with their children to discuss their estate planning concerns, they’ll need to take the time to assemble some information that will provide the building blocks for their estate plan.  At a minimum, the parents need to discuss and understand who will be in their support network, and then decide what role each person should play.  They should also consider doing the following:

  • Prepare and maintain a financial statement with detailed information including bank accounts, brokerage accounts, credit card accounts, etc.
  • Prepare and maintain a Digital Inventory with user names and passwords, including social media accounts.
  • Consider end-of-life decision-making options.
  • Determine how to involve your children (or others who are in your support group) in your estate planning process.

BEFORE THE CONVERSATION – From the Children’s Perspective:

As families grow older, sometimes the younger generation can get frustrated with their elders because they ask questions over and over, seem to have difficulty making decisions, or are forgetful.  They even seem to have a mind of their own and don’t do what they are told.  Imagine that!         

All of that may be true, but you still need to check your assumptions at the door when you sit down with your parents.  Your parents are still your parents - there is no automatic role reversal.  Your parents will remain in charge of their lives until they can’t, just like you will want to do when you get older. 

Keep in mind that being frail does not necessarily mean being incapacitated.  Capacity is an important concept.  Boiled down, a person is incapacitated when that person loses his or her ability to make legal decisions due to physical, emotional or psychological disability so that person can no longer make responsible decisions regarding his or her financial or medical situation.  This is a medical determination that can only be made after a thorough medical examination. 

HAVING THE CONVERSATION – Parent/Child Dynamic:

For a child, it may be difficult not to guide the estate planning conversation once it is started.  However, that is not the role of a child.  Often, such discussions end and nothing is accomplished because the parent is not happy with the outcome, whether such unhappiness is articulated or not. 

Instead, a child should:

  • Listen, ask questions, confirm
  • Provide or obtain helpful information
  • Not invade privacy unless invited
  • Not try to take control unless or until actually necessary

ACTION PLAN – Estate Planning Is a Process:

Ultimately, the goal is for the parents to establish an estate plan that reflects their wishes and provides the mechanisms necessary to protect them should they become incapacitated in the future.  The parent and child should work together to:

  • Develop a mutual understanding of parental wishes
  • Document those wishes for agents, health care agents, and personal representatives.
  • Identify what needs to be done to implement the parent’s wishes, e.g. set appointments with an attorney, financial planner, doctor, or accountant.
  • Update estate planning and financial planning as wishes change.

One of the best gifts parents can give their children is the gift of letting their children know what they want in the waning years of their lives.  When a family is uncertain, it opens the door to unnecessary arguments.  Further, the more uncertain a decision-maker may be, the more guilt that decision-maker will have when making those critical life-impacting decisions.  Having these important discussions and properly preparing an estate plan ahead of time gives the family the greatest chance of developing a plan that will work as intended.

Michael W. Davis is the Senior Partner of Davis, Agnor, Rapaport & Skalny, LLC. For questions about this article or other questions about estate planning documents, please contact Michael.