No one enjoys discussing their aging parents and eventual deaths with adult children, yet it’s essential they discuss their financial situations so they are informed when the time comes. Here are some estate planning tips that may help facilitate such conversations with elderly parent(s).
Begin by gathering data about your parents’ assets and liabilities. This should include statements for all major financial accounts as well as real estate, investment portfolios or any other assets they own, including real estate loans or mortgages that remain outstanding. Once you have an accurate picture of their assets, subtract their debt value to calculate their residual estate which will then be distributed among their beneficiaries upon their death.
Also important in estate planning is determining how you would like your parents’ property divided up – among siblings, charities or other individuals. Failure to document this decision could result in disputes and costly legal battles over who should receive what.
Finally, your parents should decide and document their desired funeral arrangements – this will prevent family members from bickering over this decision and allows your parent to avoid an expensive and lengthy probate process.
Your parent should appoint a Personal Representative and Trustee, who will manage the estate and distribute assets among beneficiaries. Care should be taken when choosing this individual; it’s wiser to choose someone trustworthy who is reliable than one who might not follow through as promised.