Most older adults come from a generation that believes certain financial matters are best kept private. In many cases, your parents may have met with an attorney or financial advisor and tell you that ‘everything is handled.’ It may even be awkward to talk to your parents about financial plans. However, the guidance they received is not always effective. They may have done estate planning, but not considered the implications and costs of long term care. For these reasons, and many more, it’s important for adult children to understand their parents legal and financial plans, if an unexpected crisis occurs. After all, it is the children and/or spouse who will be tasked with making decisions and executing the plan.
It can feel strange for an adult child to ask their parents about their financial plans, but it is a conversation that not enough children broach. Eventually, the finances of your parents will affect your own, especially if they have not created or updated their estate plan. Do they have a will? Have they set up a trust? Are there clear instructions about where they want to be buried or what they want their funeral or memorial to include? Obscure or non-existent plans can unintentionally cause painful arguments and disagreements among siblings, cousins, children, and other loved ones of the deceased, because without clear directions, no one really knows what the parent’s wishes were. Similarly, talking to parents about their financial plans and estate plans can help prepare adult children for what lies ahead, financially, for themselves.
How the Financial Plans of Parents Influence Their Adult Children
More and more adult children are paying attention to their parents’ finances, and are making day to day spending decisions, not taking on debt and limiting spending, based on the financial plans of the parents, or lack thereof, according to TIAA and reported on by Think Advisor. Confidence in the financial state and financial plans of one’s parents has much to do with age. Millennials, on average, are more confident in their parent’s finances than Gen Xers or Baby Boomers are of the financial plans of their parents, revealing what might be misguided optimism in the younger generation. The confidence of Millennials in the finances and estate plans of their parents may be a false sense of security, particularly if they believe that they will receive a large inheritance—an inheritance that they are depending on.
Conversation Starters for Talking to Parents About Estate Planning
It can take a while to get parents to open up about their financial plans and estate. Because of this, many financial planners and attorneys urge adult children to start the conversation early and educate them on the reasons you may be concerned. It may take a while to open up a true dialogue on the topic of an estate plan, long term care plan, or even end-of-life arrangements. We have developed several legal guides that may help you begin the conversation. Here are some additional ways to broach these subjects:
- Discuss a situation where someone you know, perhaps a “friend or coworker” had, in which their parent passed away and no paperwork could be found. Use this example to ask if your parents have their wills and legal documents in place.
- Have they considered that the family dynamics may come into play in a crisis?
- Show them the ePlan365 tool which allows family members to access important information in the event of a health crisis, or even death.
- According to Fidelity, it’s important to choose a relaxing location during a moment of calm. Talking during a crisis will hinder a real discussion because emotions will overpower the conversation.
- Discuss the importance of long-term care planning and note that estate planning alone does not typically protect assets or inheritance.
- Discuss Medicaid planning as a way to protect assets or inheritance.
- Be sincere and clear with your intentions.
- Bring up your own estate plan and ask your parents about their thoughts on it as a way to break the ice.
Call Our Maryland Estate Planning Attorneys for Help Today
These difficult conversations can be easily approached when you are armed with information. Download one of our Free Legal Guides to help them review important legal information that they may not be aware of. It is never too early to talk to your parents about their financial or estate plans. For legal guidance with creating or modifying a will, trust, or estate plan, or for the administration of an estate after a parent’s death, the Maryland estate planning attorneys at Frame & Frame are here for you. Call 410-255-0373 to schedule a free consultation.