Remember to Learn Your Parent’s Finance Plans

The unfortunate truth is that everyone’s parents will ultimately pass away even though the average life expectancy is increasing. While some of our parents pass away while we are children, other people lose their parents when they are adults.  Even though this is a grim reality, it is best to prepare for this eventuality. Because you can lose a parent at any time, you should do everything possible to prepare for this occurrence. It’s important to know just why but also how and what to talk about with your parents when it comes to estate planning.

Why These Conversations Are Important

Without documenting plans for your parent’s approach to what will happen after they pass away, you can end up in a difficult situation. Without access to your parent’s funds, you might be left to pay for the various costs they leave behind when they pass away. Unfortunately, this means that some caregivers end up spending their own money in these situations. Besides the additional costs, your parent’s end-of-life plans are also less likely to be achieved. Having conversations about these matters before your parent passes away or becomes incapacitated makes sure you’re able to tackle these issues.

How Conversations About These Issues Should Be Framed

Remember to approach these issues with your parent with care and respect. Many people find that personal finance issues are an uncomfortable topic. Your parent understandably might find it difficult to discuss death and money matters with their child. One way to begin such conversations is to bring up how your parent handled their own parent’s death if they were in a position to manage matters after this happened. In these situations, you might want to begin by asking your parent how they handled this situation. If this topic does not apply to your situation, you might be able to think of another way to lead with a personal topic that gets your parent talking about estate planning. 

What to Discuss With Your Parent

You should assess whether your parent has important estate planning documents like a financial power of attorney that appoints someone who will make financial decisions for your parent if they end up unable to do so for themselves. You should also inquire about whether your parent has similar documents regarding medical care, which might include a health care power of attorney or advanced healthcare directive.

Besides learning what types of estate planning documents your parent has, you should also determine whether these documents are up to date. This might involve asking about a living trust or will be created by the parent accurately reflects what assets your parents own, which might include real estate, stocks, or vehicles.

Remember, if your parent passes away without an estate plan, state law will dictate who receives your parent’s assets. This distribution might not be passed on in the manner that your parent intends. If your parent’s assets reach a state where they are distributed according to state law, it will be too late for you to exert any control or change how assets are passed on.

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