Millennials, talk estate planning with your parents
NEW YORK (BLOOMBERG) – Despite years of being seen as self-involved, overindulged children who cannot get it together, millennials have been growing up.
In fact, some millennials are ageing into their 40s. This means that our parents, many of whom are baby boomers, are reaching an age at which we will need to have some difficult conversations with them. One that is paramount is the estate planning discussion, which goes far beyond the matter of wills and inheritance.
We often think of estate planning as the process of designating who receives what assets and how to settle any debts. But an estate plan also involves detailing who would make decisions should a parent be incapacitated.
That way, if an emergency arose, loved ones could immediately focus on their care instead of stressing about how to make critical choices. Without an estate plan, a child may be at a loss about what a parent would want, and the courts may need to step in.
Documents and information you need
Wills are important for settling an estate upon a loved one’s death, but there is other paperwork your parents (and anyone, really) should have in order while they are alive.
Documents like power of attorney, healthcare proxy and a living will are key because they designate a person to do things such as pay bills and handle other financial transactions as well as make medical decisions. You want this in place before there is an issue, especially if your family has a history of dementia or Alzheimer’s.
In addition, you need to know where all this information and paperwork is actually stored. Ask your parents to create a master document with passwords to important accounts and to get bills set up to autopay, especially if only one person knows all that information. Digital solutions like Everplans store information like passwords, how to pay household bills and financial and legal paperwork.
How to broach the conversation
It is not easy raising this topic with a loved one, but trying to be proactive about planning is a way to reduce anxiety before entering a high-stress situation, such as a parent in a coma, being diagnosed with illness or falling victim to an accident.
Positioning the idea of setting up an estate plan as a way to alleviate anxiety and stress for you, the child, may encourage a still living parent to engage with you and get the paperwork handled.
One approach is taking the route of asking for advice to start the conversation. For example: “Since getting married, Joe and I are working on our estate plans. How did you two decide who would be the power of attorney and health care proxy?”
Even an answer as simple as “we don’t have those” gives you the information you need to follow up and encourage them to get the paperwork done.
Another option is to be direct, especially if you have a family history of illness that would leave a person unable to make decisions himself. You can say something like: “I’m concerned about our family history of dementia. I want to ensure we have all the legal documents ready, so if anything were to ever come up, we could immediately focus on your care instead of worrying about the legal and financial paperwork.”
While I do not think scare tactics are the most effective way to have this conversation, it is worth mentioning that having estate planning paperwork handled means your parents get to outline their wishes instead of leaving you guessing – or, worse, having the courts appoint someone else to make important decisions.
You could also try going through the process together in an effort to seem more like allies. That way, you are not just reinforcing the point that they are ageing. Even people who are young and healthy should have estate plans.
The goal is to help, not bulldoze
All this paperwork is critical not only for your parents, but also for you, in order to best help them. However, if your parents stonewall you and refuse to discuss their estate plan, there is not much you can do.
You really should not bully them into submission, especially as they probably will not react well to your trying to parent them. This is particularly true if you are simultaneously trying to care for your parents by, say, encouraging them to uproot their lives and move into your home, a retirement community or an assisted living facility.
Instead, be willing to bring this up slowly and with respect. The earlier you lay the groundwork, the better, because it gives you time to gently make progress.
• Erin Lowry is the author of Broke Millennial, Broke Millennial Takes On Investing and the forthcoming Broke Millennial Talks Money: Scripts, Stories, And Advice To Navigate Awkward Financial Conversations.
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