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Your Estate Plan: Is it Time to Share?

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Posted on Dec 19, 2012 | Share this post: Like Us on Facebook Join Us on Google Follow Us on Twitter

Adult children with aging parents or aging parents with adult children may be wondering, “Is this the holiday season to have ‘the talk’ about finances?”

A recent survey from Fidelity revealed that there’s a knowledge gap between grown kids and their parents when it comes to retirement and estate planning.  Examples of the disconnect:

  • 24% of children believe they will have to help their parents financially in retirement, while 97% of parents say they will not need help.
  • 97% of parents and children disagree on whether a child will take care of their parents if they become ill.
  • Children underestimate the value of their parent’s estate by an average of more than $100,000.

Articles about the survey suggested that this lack of awareness is a big problem, and everyone needs to get to the table and talk turkey.

At Bogutz & Gordon, this topic comes up fairly frequently.  Attorneys here recommend that  a couple of details should absolutely be shared, but a total tell-all is not necessary.  Every family is different and every situation is different, and ultimately it’s up to an individual to decide how much children or other beneficiaries need to know.

As far as your overall estate plan, at least let loved ones know there is one.  Your loved ones also should know where they can locate the original documents.  If the originals are with an attorney, share the name of the firm or where to find information about the law office.  If the originals are in a safe deposit box or stashed away in the home office, make sure someone has access to the safe deposit box or has a general sense of where to find the documents in the house.

In addition, it’s a good idea to let the agents of both medical and financial powers of attorney know that you have selected them for those specific roles.

The documents everyone should consider sharing are your medical power of attorney, which names a person (or persons) to make medical decisions if you are not able to, and your Living Will, which explicitly states what kind of care you wish to have — or not have.  Unlike any of the other documents in a typical estate plan, these documents might be needed in an emergency, in the middle of the night after an accident or a sudden ambulance trip to the hospital.  Making sure your agent has a copy of their powers and your wishes can make those situations easier.

Sharing the Living Will with other loved ones also can give everyone a chance to discuss the issues and give family members some comfort, if the time comes when the document must be used, that the document expresses your true intent.  Family members and/or the person chosen to carry out your wishes won’t be left wondering whether the decision to, say, withhold life support, was simply part of the attorney’s boilerplate language and was never read.   In addition to your health care wishes, your medical agent should know whether you have a funeral or burial plan.

For your financial power of attorney, the agent’s job will be easier if you make sure he or she knows where to find information regarding bill paying, where your accounts are, and who your financial advisor is if you have one.  You need not disclose any particular details of your financial situation, however.

If you think your family would benefit from a more in-depth discussion, here are some resources that can help you get the conversation started: quick tips from Forbes, more meaty ideas from Fidelity,  and an article on using formal mediation techniques.

Contributing: Teresa Lancaster, Ana Perez-Arrieta, Benjamin J. Burnside, and Craig Wisnom