Besides worrying about your own estate planning, what about your parents’ estate planning? If something happens to your parents, are they prepared? More importantly, are you prepared?
The questions you need to ask your parents:
• Do your parents have living wills and durable powers of attorney for health care decisions?
These are what the doctor and hospital are asking for when they ask if your parents have “advance directives.” If your parents don’t have these documents and they need medical decisions made for them, you may be required to petition the court to set up a guardianship over them and name you or one of your siblings as guardian.
• If you are named to make medical decisions when your parents can no longer do so, do you know what your parents would want you to do?
Ideally, they have talked to you about their wishes for end-of-life care. Even better, encourage them to give you written guidance by completing a worksheet or workbook on how they feel about life and death issues.
• Do your parents have powers of attorney for financial affairs? Who are they naming to act on their behalf? How long ago were the powers of attorney signed?
If your parents don’t have these documents and they need financial decisions made for them, you may be required to petition the court to set up a conservatorship over their finances and name you or one of your siblings as conservator.
• If you are named to act on their behalf for financial affairs, do you know what assets they have and where they are?
People of your parents’ generation are not used to sharing their financial information with anyone, especially their children! But you need to know what their assets are, where they are and how they are held (jointly, with beneficiaries, etc.) in order to help them if something happens to them. Also, you need to know who their advisors are – attorney, accountant and stockbroker.
• Do your parents have wills or do they have a trust?
Ideally, your parents will have planned to avoid probate. Whether their assets will be transferred by the probate process or not will make a big difference to you. Probate is time-consuming and expensive.
• Has one of your parents may diagnosed with a condition such as Alzheimer’s, Parkinson’s or other condition that may require long-term institutionalization?
There is planning that can be done to protect your parents’ assets but it generally needs to be done at least 5 years before they are institutionalized.
Many times adult children accompany their parents to meetings with their attorneys. That can be really helpful for you, so that you can make sure that the above items have been taken care of.