Estate Planning Discussions: Sometimes Difficult but Worth It

Recently my parents, both of whom are in their late 60’s and in relatively good health, shared their estate plans with me. They told me their wishes about how their assets would be distributed, who would serve as executor, who they named as durable and health care powers of attorney, etc. It was the first in-depth discussion I’ve ever had with my parents about their mortality. Afterward, they gave me copies of all the relevant documents in case of incapacitation or death. As I reflected on our discussion, I thought, “what a wonderful and selfless gift.” They had taken the time to arrange their financial lives, talk with me about it, and assemble a valuable resource. This binder of documents will ease our family’s administrative burden, providing some peace of mind during and after what will be a tough time (hopefully many years down the road).

I recognize that each family’s situation is different and the comfort level of discussing subjects like finances, inheritance, and death can vary greatly from one family to the next. The approach my parents took will resonate with some readers but seem foreign to others.

For someone who does not want their adult children to know too much about their personal finances, one idea is to store copies of the pertinent information in a central location and let the children know that such a collection of important documents exists but only allow them to access it when needed. This approach keeps the parent’s finances private while alive, but accessible to the appropriate family member(s) if death or incapacitation occurs. If a safety deposit box is used to store copies of the information, you can appoint a deputy who will have access to the box. However, you can retain control of the box by not providing the deputy with a key but letting them know how to get the key when needed. Another point to remember is that in case of death, the person named attorney-in-fact in the deceased’s Power of Attorney document cannot use this document to gain access to the safety deposit box because the Power of Attorney expires at death.

It is understandable and reasonable that some parents do not want their children to know what their bank account balance is or how their portfolio looks. However, surprises that reveal themselves in Wills and beneficiary designations (for those assets that transfer outside the Will) can cause a family rift. The peace that the living parent may have been trying to preserve by not talking about inheritance can be undone after they are gone. Discussing inheritance and estate planning with family members can be difficult, but it offers an opportunity to explain decisions, answer questions, and work on resolving any conflicts that may arise.

At Woodward Financial Advisors in Chapel Hill, NC, we work with our clients to review, develop and maintain their estate plans. Whether you are a parent or the child of an aging parent, we are here to listen carefully to your concerns and respond to your questions regarding estate planning.