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Perspectives | August 26, 2019
Talking with your parent(s) about major medical and financial decisions can be difficult. Discussing how to distribute their assets upon their passing can be nearly impossible and it is often avoided at all costs.
Consider the facts: Our parents aren’t getting any younger. Failing to prepare and understand the in’s and out’s of your parents estate can cause unneeded stress and frustration in times of distress and emotion. According to a recent study by Forbes, nearly half of Americans over 55 do not have a will. To make matters worse, only 18 percent of people in that age range have all of the recommended legacy plan essentials: a will, a health care directive, and durable power of attorney.
Most people express that they want to avoid becoming a burden or causing financial hardship for their loved ones. In fact, they say this is their number one objective. However, most people admit that their lack of effective end-of-life planning could create long-lasting problems, confusion, and emotional turmoil for their families.
For you parent(s) wishes to be honored, they need to have the right financial and legal paperwork and plans in place. Once you understand your parents’ wishes, there is peace of mind and the process of growing old is easier on everyone.
It’s tempting for both parents and children to put off the more difficult conversations. But vital issues, like power of attorney and long-term-care insurance, have to be discussed.
WHAT’S HOLDING PEOPLE BACK?
The most common inhibitor holding people back from end-of-life planning is the confusion around where and when to start. When you don’t understand the basics about what you need and how to prepare the necessary documents, it’s hard to start at all.
WHY IS END-OF-LIFE PLANNING IMPORTANT?
If you die without your affairs in order, you subject your loved ones to a time-consuming, expensive, and stressful process while they are already in mourning. Without a clear estate plan in place, assets get sent to probate and a court decides how to divide them up while also potentially subjecting your assets to federal and/or state estate taxes.
SO WHERE DO YOU START?
Similar to starting that new workout routine, the best thing you can do is to take action and just start now. While taking that first step can be uncomfortable, if you wait for the perfect time, that time may never present itself. You don’t need to have all the answers from the start and everything does not have to be and will probably not be perfect after one conversation. This is ok! The most important thing to do is to get the ball rolling – you can always make edits and modifications later.
Important Estate Documents to Consider:
People to Consider:
TALK TO YOUR FRIENDS AND FAMILY
Odds are you are not alone when thinking about and/or having these tough conversations with your parents. Talking with your peers about these matters can help give you ideas and make you feel less alone and confused. It is likely that someone you know has lost a parent and dealt with the stresses and emotional frustration of not having the right documents in place. Hearing from them firsthand can help motivate you to avoid ending up in the same situation.
SEEK PROFESSIONAL GUIDANCE
As financial advisors, our mission is to help simplify your life and empower you to make better, smarter decisions by understanding the impact these decisions have on you and your family as a whole. One of the first items we cover is ensuring that your estate is in order and that you have all the right documents in place. Working with a financial advisor can help guide you in these conversations as an unrelated party with your best interests in mind. An advisor could also offer some perspective on legacy planning, including ways a trust or life insurance can help you minimize taxes and manage assets for your loved ones. Many advisors will also be able to help find you an estate planning attorney that is the right fit for you and your family while keeping costs within your budget.
The most important takeaway is that there is never a perfect time to take care of estate planning. End-of-life planning will never be an exciting activity to complete since it’s pretty morbid. However, you’ll feel much better once it’s done, and your loved ones will benefit more than you can imagine. So, take action today and start having these important conversations. Failing to prepare is preparing to fail – don’t put it off any longer!
Securities offered through LPL Financial. Member FINRA/SIPC. Investment Advice offered through Winthrop Wealth Management, a Registered Investment Advisor and separate entity from LPL Financial.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific tax or legal issues with a qualified tax advisor.