Estate Planning: How to Protect Your Parents’ Assets
Do you know what will happen if your parents pass away? It may be time to ask them.
It’s the conversation no one wants to have, but talking with your parents about their estate plan is crucial. An estate plan establishes what steps to take in order to protect and divide a person’s assets after he or she dies.
Speaking with your parents about their death is difficult, to say the least. But when people you love pass away, the last thing you want is to be worried or confused about what to do with their assets. There are many horror stories of families that are caught off guard by the death of someone who has no legal plan in place.
Learning how to protect your parents’ assets is vital to avoiding that kind of nightmare. Having a plan well before anything happens will make things easier for everyone involved. Here’s how to discuss estate planning with your parents and protect their assets:
1. Set a Time to Talk
No one wants to be surprised with a conversation about his or her passing. As such, don’t attempt to bring up the topic while you’re making dinner with your parents one night. Reach out to them and let them know you want to set aside some time to talk with them. If you have siblings, try to make sure that they’re present for the conversation as well. This is something the whole family needs to be in on, if possible.
Your parents might also approach you. That’s great, but you still need to understand the process and have a clear vision of what the plan will be.
Leigh, 29, was approached by her parents about their estate plan when she was 19. At the time, she didn’t understand such things, but now that she’s nearly 30, she plans to broach the topic again. This time she has questions prepared. For instance, she’ll ask who the executor of their will is. Her parents are open to talking about it all, so Leigh isn’t too worried about having the conversation. However, she does want to be fully prepared this time.
“My parents have always been pretty open about money,” Leigh says. “So as kids, they told us who their will set as our guardian, which I think was really great to understand. But when we talked last time, I think that we should have asked more questions. My husband’s and my parents are now in their 60s, so questions about the executor of their estates and where their wills are seem more important than they did five years ago.”
2. Communicate Clearly and With Love
When you’re deep in the conversation about estate planning, you can start feeling a little lost or upset.
Try to start every sentence from a place of love. You don’t want your parents to feel attacked or as if you’re having this conversation just to find out what you get when they die.
Instead of saying, “What’s going to happen to your money?” — which can come across as greedy and rude — ask your parents, “Do you have any plans made?” This is a much kinder statement that gives them an opening to explain what they have and haven’t done yet and why.
You can also practice active listening throughout the discussion. Phrases like “What I’m hearing from you is . . . ” and “It sounds as if X is important to you; am I correct?” can help you navigate the conversation with clarity and keep it centered on what your parents’ desires.
3. Be Flexible With What Information You Discuss
Maybe your parents have a plan that they want to go through with you point by point. Maybe you want to go through a plan in detail and they don’t. You should have an idea of what you’re looking for from this conversation, but be flexible about how much information your parents share. Here are three things to start off with when talking about estate planning:
- Find out whether your parents have a will.
- Learn whether they have a burial preference.
- Figure out whether they have given someone power of attorney in case of a health crisis.
These are general starting points that will give you a big-picture idea of your parents’ estate plan. (Remember, ask your questions carefully and respectfully.) If your parents have nothing prepared, you can work together to get them organized.
If they already have plans in place, you just need to ask for a little more information. Frame it like this: “Knowing some details will help me carry out your wishes and avoid any complications.”
Let them know that you’re not looking for details out of some morbid interest, but because you want to be informed to make everything as smooth as possible.
Sarah, 32, felt it was important to know where all her parents’ information and accounts were when they spoke.
“Once my parents had their estate plan together, I knew I needed to know what was in it,” she says. “I’m an only child, so the logistics are fairly straightforward: Everything will pass to me, and I’ll be the executor. That’s just Step 1, though. Knowing where they have their money, if there are insurance policies in place, and what pensions they are receiving will make it so much easier when the time comes. Having the talk also gave my parents a chance to explain how they wanted to live out their final years, especially if they were struggling. Knowing what they want means not having to make those decisions for them.”
Final Thoughts on the Estate Planning Discussion
Remember, this is not your decision. Even if you’re the one instigating the conversation, the money that you’re discussing is not yours. What your parents choose to do with it is up to them, and you have to resign yourself to being okay with what they decide to do.
And just because discussing how to protect your parents’ assets is difficult doesn’t mean you can skip the conversation. Set up a time to talk, be respectful, and ask questions to make it as easy as possible. Let your parents know that you’re on their side and the conversation will start off on the right foot.
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