Failing to Plan is Planning to Fail
In 2008, Congress recognized the need for the public to understand the importance and benefits of estate planning by passing House Resolution 1499, which designated the third week of October as National Estate Planning Awareness Week. Nevertheless, according to a 2019 survey carried out by Caring.com, 57% of adults in the United States have not prepared any estate planning documents such as a will or trust despite the fact that 76% viewed them as important. Many of the respondents said this was due to procrastination, while many others mistakenly believed that it was not necessary because they did not have many assets.
Use the Time you Have to Create or Update an Estate Plan
We are all rethinking our priorities in light of this deadly pandemic. With many of us having more time while we hope and pray that the world can get COVID-19 under control and allow us to go back to some sense of normalcy, now is as good as time as ever to not only to take steps to make sure your own estate plan is up to date, but also to talk to your family members–especially elderly parents–about creating an estate plan. Estate planning is often a difficult topic to broach, as it brings the unpleasant topics of aging and death to the forefront of our minds. However, creating a proper estate plan can also provide significant peace of mind for your family members by ensuring their life savings are protected, plans are in place in the event they become ill, and their property is passed down according to their wishes.
Tips to Start a Conversation and Important Discussion Topics
1. Be sensitive to your family members’ feelings. Put yourself in their shoes, and keep in mind that few people are eager to dwell on the subject of their own mortality. One way to begin the conversation is to talk first about the need to plan for illness and provide instructions in the event they become too sick to communicate with doctors or manage their own finances.
2. Involve other family members in the conversation. If you are planning to speak to your parents about the need for an estate plan, it is important to try to include any siblings in the discussion to avoid giving the impression that you are trying to influence or control your parents’ choices.
3. Several Key Topics –
*Discuss the importance of having Financial Powers of Attorney and Health Care Documents: Talk about the essential nature of having certain estate planning documents (powers of attorney and advance health care directives) in place now in the event one loses the ability to make decisions on their health care and finances. Otherwise they risk losing all control over who will make decisions and limit those decisions for health care and finances. Failing to have such documents will force a family to spend potentially tens of thousands of dollars on public court proceedings that will continue until that person dies.
*Discuss the importance of having a Will and Trust: If one fails to have a to have a Trust to designate who will be in charge of settling their affairs and who and in what proportions they want their estate to be divvied up, then a probate proceeding will be required. A probate proceeding costs thousands of dollars, takes over a year to settle, and your property gets distributed according to the laws of the state in which you passed. Wouldn’t you rather be the one to make those decisions for your family rather than the government?
*Identify Financial Accounts and Other Assets: Find out about and make lists of insurance policies, accounts, and other property.
*Identify Digital Account and Assets: Find out about and make lists of all accounts accessed on-line (need to have the username and passcodes) and do not forget about being able to access cell phones as well. Otherwise you could be locked out of being able to obtain critical information necessary to assist a loved one with their finances.
*Consult an elder law/estate planning attorney: Once you have this important conversation with your family members, they hopefully will realize it is time to get a plan in place. Equally important, they will understand the need contact an experienced elder law/estate planning attorney who can help them create an estate plan tailored to meet their needs and carry out their wishes. They might also realize they need to update am existing plan that is outdated and no longer fits their goals and wishes.