Gaining a better understanding of your elderly parents’ estate plan or estate trust that includes real estate can be difficult to talk about at first. However, if you don’t begin the conversation now, a sudden change in your parents’ health or an untimely death can quickly lead to an estate-planning nightmare. If you don’t understand your parents’ wishes or if a will is not in place, local government will step in and decide how your family’s assets, including real estate, should be decided, through a lengthy and costly process called probate. Taking an active, compassionate role can prevent a big mess.
Broach the estate planning talk before one or both of your parents needs help managing finances or health. Use your own example of how you created an estate plan to demonstrate the protections you have put in place to ensure that your spouse and children are taken care of should something happen to you. Bring an article to show your parents how important it is for parents to talk to their adult children about estate planning, including property investments and insurance policies, and how an estate plan can help protect them, should they ever need help managing their financial affairs.
Acquire copies of important legal documents, such as the deed to their house or other real estate, tax returns, estate planning papers, trusts, as well as the location of their lockbox keys so you can take action on their behalf. Don’t forget to record bank account numbers and investment accounts. Make a list of your parents’ bank, accountant, attorney, including any financial and estate planning firms, as well as their mortgage company.
Gain power of attorney. If you need to step in and help your parents manage their estate, you need to have power of attorney. Power of attorney allows you to legally handle financial transactions, including signing checks or selling real estate. Without power of attorney, you cannot manage your parents’ assets. Acquiring a durable power of attorney gives you immediate accessibility, whereas other powers of attorney designations often require additional legal steps that can delay taking effective action on your parents’ behalf.
- Regardless of your parents' net worth, they should have an estate plan in place, with an assigned power of attorney, to protect them from potentially costly legal problems later.
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