Do you know what kind of estate plan your parents have, if any? And conversely, do your kids know what your wishes are in the event of your death or incapacity? Beginning a conversation with your elderly parents or with your children about planning to prepare for eventual incapacity and death can be a very difficult thing to do.
The holidays can be a great time to begin the conversation and discuss wishes, desires, and completing a solid estate plan together. You may find out that your parents have a plan that includes a living trust and reflects their current needs and desires. However, frequently, parents set up a plan when they have young children at home, and the documents sit in their home or safe deposit box with no updating. This can be dangerous. Has your or your loved one’s estate plan been kept up to date? Does it reflect the current needs and circumstances of their loved ones, including you? Has the plan been updated for changes in the law? Does it reflect the newest planning strategies?
Why am I making a big deal out of this? I regularly review estate plans, including living trust plans that contain multiple defects. These defects are not minor. They are often the kind that will cause unnecessary expenses, unnecessary court proceedings, attorney fees, taxes, and exposures to creditors and ex-spouses.
To help you get the conversation started this holiday season, here are five points you should raise with your family members:
1. Are healthcare and living trust documents properly updated for the federal law called “HIPAA”?
2. What steps have been taken to protect inheritances from divorces, lawsuits, creditors and government claims?
3. Does the living trust contain the right planning strategy to avoid unnecessary paperwork and fees for the survivor of a married relationship?
4. Have you adequately protected assets and prepared for the costs of long-term care?
5. What kind of incapacity plan is in place? In other words, who will make medical decisions for an incompetent person, and how will the person receive care?
If you would like to more information, please contact our office for a free 30-minute estate planning consultation. We would enjoy meeting you and your family to determine your needs.