Talk to your parents about their estate plan now to avoid chaos later.
Chances are, you’d rather not think about your parents passing away, much less peruse the legal documents related to their eventual death. However, as an adult child, you need to be familiar with certain aspects of your parents’ estate plan.
That doesn’t mean you should go nosing around their home looking for the will while they’re on vacation. But you’re wise to bring up the topic with your parents to avoid confusion and possible family bickering when the sad day of their passing arrives.
1. Location of estate documents
Knowing where the last will and testament, powers of attorney, trust and other estate plan documents are located is crucial in the event of the death of a parent or a medical crisis that renders Mom or Dad mentally or physically incapacitated. The last thing you want in an emergency is to rummage through office files, cabinets and digital files while reeling from the loss or trying to handle a medical crisis.
Ask your parents where their estate plan is located and how you can access the estate documents. Is it in the home office, a safe deposit box at the bank or a safe in the basement? Find out now, so you can spare yourself the grief of yet one more task to complete when a parent dies.
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2. Name of the executor
The estate planning process includes your parents naming an executor. The executor is the person designated to pay bills, carry out funeral, burial or cremation arrangements and other wishes and settle the estate. Most people appoint a spouse, adult child or other family member while others name an independent third party as executor.
If you are the named executor, make sure you’re up to the task before taking on this stressful undertaking, usually carried out while mourning. If another family member is named executor, make sure your parents have informed the person, and if they haven’t, urge them to do so to avoid misunderstandings or family bickering later.
Find out: Ask Yourself These 7 Questions Before Becoming the Executor of an Estate
3. Who is the power of attorney for finance?
In addition to a last will and testament, your parents’ estate plan should include a named durable Power of Attorney (POA) or “agent” to handle their finances if they become incapacitated and unable to make their own decisions. Under those circumstances, the durable power of attorney for finance can access financial accounts and make certain financial and legal decisions on their behalf.
Just as with the executor, it’s important to make sure that the agent named in the power of attorney for finance document is willing to take on the role. If you are the named POA, talk openly with your parents about their financial preferences if they become incapacitated.
Make sure you have a list of all online passwords to their financial, credit card, utilities or other accounts, along with life insurance, retirement account or other important financial documents. Ask your parents for a copy of the durable power of attorney document for your own records.
Find out: 7 Ways You Could Be at Risk of Losing Your Inheritance
4. Health and medical instructions
Your parents’ estate plan should also include a durable power of attorney for health care, which names the person charged with making health and medical decisions for them if they become incapacitated. Have they named you, a sibling or another family member? If so, it’s time for a family meeting so you will all know what they would want in specific health and medical situations.
For example, does your parent want certain life-sustaining measures such as a feeding tube, breathing machine or other life support if there is no chance that they can have a good quality of life? What about CPR if their heart stops? Having this tough conversation can help alleviate misgivings and regret over agonizing end-of-life decisions later.
If you are named the durable power of attorney for health care, make sure you have a copy of the document and that their hospital and doctor medical records also show you are the power of attorney.
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5. Keep copies of estate documents
Ask your parents for copies of the health care power of attorney, power of attorney documents for finance and any other documents you may need for your own records. Then place the documents in a secure location where you can access them easily.
Published by Debt.com, LLC