Carolyn Thompson, a Sioux Falls, S.D., estate planning attorney, says many people ask her "how do I bring up the importance of estate planning with my folks?"
"The younger generation often feels torn because they have heard nightmare after nightmare of what has happened to friends or other families when a parent passes away. They hear stories of siblings no longer talking because parents either did not have an estate plan or had a plan that lacked clarity or was impractical to administer after their death. Others have heard stories of families forced to sell homesteads or farmland because a traditional estate plan simply divided all assets equally among the children and siblings had different priorities on the use of the land. Some just want to know that what their folks worked so hard for their entire life will be administered in a smart and protective way."
But, on the other hand, adult children may be hesitant to broach the subject with their parents because they don't want to be perceived as greedy.
"They don't want their parents to think money is motivating the conversation," Thompson says.
The greatest value in the plan is in the clarity and peace of mind that it offers to families, according to Thompson.
"Money and other assets will be transferred one way or another (although good planning can certainly provide more tax-efficient and workable solutions), but having a quality estate plan in place helps ensure that other intangible assets are preserved, such as family harmony," she says.
To start this important conversation and hopefully make it most effective, Thompson suggests:
Have a family meeting. This approach depends on how parents would receive it. You don't want to appear to be ganging up on them, but there is often a benefit to having all the children present for the discussion. This demonstrates that it is an issue that affects each member of the family. You can talk about how you want a clear plan in place now, so that when your parents are gone, these decisions don't have to be made by the children. In that way too, the whole family is aware that discussions are happening, and open communication now can help alleviate questions later.
Encourage the review of a current plan. "Often parents say, 'We took care of that 10 years ago.' One thing to consider: was the plan drafted by a general practice attorney or created by a qualified estate planning attorney? An estate planning attorney typically has more in depth understanding of not only the tax and other statutory nuances related to estate planning, but also the day-to-day practical issues that are involved in creating a clear plan that can be administered. If nothing else, a review of the current plan verifies that their plan continues to address their goals and life circumstances."
Complete your own plan. This not only provides a "launching point" for a discussion with your parents, but also provides you with more knowledge in how the process works, and the benefits to having an estate plan in place. "Just like they say on the airplane, if the oxygen masks come down, put yours on first before you assist someone next to you," Thompson says.
As with all conversations, be considerate of those involved, understand that some individuals may need more time to process than others, and may not react in the same way that you would to a particular situation.For more information, see www.cathompsonlaw.com or call (605) 362-9100.