Ask Your Parents - "What's your estate plan?"

/ Planning Within Reach/

Many people have something with regards to estate planning, but often what they have is not complete, not updated, or not sufficient. Children can play an important role by helping their parents get their affairs in order. Given that this could potentially be a tough conversation, here are some questions to get you started.

1. Do you have an Estate plan in place?

If the answer is yes, what documents do they have? The 4 most common are a Will, Trust, Durable Power of Attorney (DPOA) for Finances, and a Healthcare Directive. Ask them to review all documents with you to make sure they are signed and up to date.

If they do not have a plan, encourage your parents to meet with an estate planning attorney. My parents were not sure how to get started, so I researched and provided them with 3 local estate planning attorneys. I also offered to attend the meetings on speaker phone to help translate anything they didn’t understand.

2. What will I be required to do?

Hear from their own words what they would like you to do after their disability or death. Then read the documents and make sure the words align with their intentions. Confirm that everyone named in the document has been notified that they will play a role. If your parents don’t know who to name, suggest they look into a Professional Fiduciary.

3. Where are their important documents?

Know where to find items such as:

  • All estate planning documents created to date

  • Tax returns and income statements (examples include W-2, 1099, K-1)

  • Social Security cards and birth certificates

  • Titles to homes, cars, boats, trailers, and any other motor vehicles

  • A recent Balance Sheet (list of assets and debts)

  • A list of beneficiary designations for retirement accounts, life insurance, and pension plans.

Now is also a good opportunity to confirm that your parents are using a password manager, such as 1Password, to create and store unique passwords. You may also want to log in to their bank accounts with them and ensure that they have 2-step verification set up wherever possible.

4. What items are most meaningful to you?

Find out what physical items your parents want you to keep after they are gone. Ideally, they would go through their possessions and have everything organized ahead of time, but that is rarely the case. Make a list of all important items, the approximate value, who they want to receive it, and perhaps a story about the origin of the item.

5. What about digital assets?

What do they want you to do with their cell phone data, such as pictures and messages? Do they want you to keep their Facebook or social media accounts open? Computers and cell phones host a massive amount of data that either needs to be distributed or deleted upon a person's passing.

6. Who should I contact?

Your parents likely have financial professionals who can help you. Have them document a list of trusted professionals, such as their:

  • Financial Planner /Investment Manager

  • CPA/Accountant

  • Lawyer

  • Insurance agent

  • Real estate agent

This conversation does not need to happen in one day. If it makes sense to spread it out over a few weeks or months, do what works for them. Re-iterate that the goal is to ensure that their wishes are met and the best way to do that is to get clear and organized now.

originally posted 5/7/2018

Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.

Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.