By: Drew Hanessian

Do I Have To?

If you’re like most people, you’re not looking forward to having a conversation with your parents about their estate plan and/or financial situation. Discussing money can be challenging because it deals with our values and goals. Once you factor in complicated family relationships and the powerful emotions involved in end-of-life decisions, it’s understandable that the specter of such a conversation leads many to never engage in it at all.

Unfortunately, not having the discussion can lead to major problems as loved ones age and eventually pass away. According to a December 2020 Wells Fargo/Gallup poll, 43% of investors between the ages of 50 and 64, and 17% of those 65 or older don’t have either a Will or an estate plan. This means that a court will have to decide which creditors need to be paid and who inherits whatever is left. Even with a Will in place, in the absence of a trust, the probate court process is required to make sure everything is in order. Depending on the state you live in, this can be a long, expensive process — looking at you, California!

It’s crucial that these documents are up to date, especially after any deaths or divorces in the family and also that the location of the documents is known.

Other important questions for elderly parents could include:

Do you have long-term care insurance or a plan in place in case long-term care is required?
Is someone advising you on financial matters?
If you can no longer take care of yourself, have you thought about where you’d prefer to live?
Are your life insurance beneficiaries up to date?
Is there a succession plan in place for your business?

Knowing your parent’s financial situation is important for children too as they prepare for their own retirement. A solid financial plan can easily be thrown off track if parents require financial support late in life.

How to Start the Conversation

Chances are, somebody in your extended family and friends circle has had a health scare or even passed away in the last year. Talking about their situation and the aftermath can be a segue into discussing what-if scenarios for your family. Bringing up a recent news article can also be a good starting point.

Difficult topics are sometimes best left for in-person conversations where the environment is relatively calm and comfortable - the holidays and birthday gatherings can present good opportunities since you will be in the same location. However, having a heated discussion at the Thanksgiving table is not advised!

As with any conversation that could lead to conflict, it’s important to keep the shared goal in mind - you want to have a discussion about making sure your parents’ desires are understood and that they’ll be well-taken care of. It’s important to convey that the process is about respecting their wishes, protecting their legacy, and coming from a place of caring.

It might also be best to involve any siblings in the process to avoid confusion later on, especially if there’s likely to be an inheritance.

If parents are hesitant to have the conversation, emphasize the importance and the impact it could have on the family if it’s not addressed. You can talk about the impact on celebrities such as Jimi Hendrix, Pablo Picasso, and even Abraham Lincoln!

Pro Tip: It’s best to involve siblings in the process early on to avoid confusion and conflict.

More Ways to Prepare for the Conversation

Plan the time and environment.

Ideally, you want to have the discussion in a relaxed state of mind for both you and your parents - not in the face of a crisis. Avoid outright confrontation, but don’t delay - the time to engage in estate planning is well before it’s needed. Try to be as supportive as possible by making sure they have space to communicate what their wishes are and showing that you understand.

It might be helpful to pick an environment that avoids an interview-like feel. For example, broaching the topic during a walk in the park could be better than sitting across the dining room table.

Be sincere about your intentions.

Be clear that you are initiating these talks out of concern that proper plans are in place so that you can do what they would want you to do. Let them know that you are bringing this up because you care about their well-being.

Offer to help.

Estate planning, like any task we’re not used to, can be overwhelming and lead to inertia and inaction. By offering to help find a qualified estate planning attorney, set up meetings, and accompany them, you’ll help them overcome these challenges.

Address concerns.

Besides the logistical hassle, parents may be concerned about the cost, time commitment, or initiating conflict within the family. Be upfront that working with an expert attorney may cost a few thousand dollars and take several hours. But the attorneys, and you, will provide support along the way.

Estate planning is a crucial, though often neglected pillar of the financial planning process. While you need to convey the importance to your parents and assist where possible, it’s of utmost importance that parents feel that they’re heard and their decisions respected. By approaching the conversation directly and with empathy, understanding, and respect, you can help ensure that your parent's wishes are met and that family members and loved ones are protected from unnecessary strife in the future.

If you’d like to discuss the best way to proceed for your family’s situation, please don’t hesitate to reach out.

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