Morgan Stanley
Wealth Management

The State of Your Parents' Estate

Jul 17, 2023

Talking with a parent about estate planning is never easy. Here are several conversation starters that can help adult children and their parents’ plan.

Key Takeaways

  • The sooner you start talking to your parents about estate planning, the more time you'll have to discuss their wishes.
  • There is no one-size-fits-all estate plan. The best plan for your parents will depend on their individual circumstances.
  • Your parents' needs may change over time, so it's important to review their plan periodically.

Talking with a parent about estate planning is never easy. Here are several conversation starters that can help adult children and their parents’ plan.

 

As of 2021, Americans older than 65 now number nearly 55.8 million,1 a number that is expected to climb significantly as Baby Boomers continue to age. Even with this “graying of America,” a recent Caring.com survey showed  2 out of 3 U.S. adults do not have estate planning documents at all,2 jeopardizing the smooth transfer of hard-earned wealth from one generation to another.

 

The issue is often around starting the difficult conversation of estate planning. Talking with a parent about sensitive topics like incapacity or end-of-life issues is never easy. But adults with aging parents can open the lines of communication about the family’s financial future and the need to have a plan.

 

Here are four questions to ask:

Q
Have You Spoken with a Lawyer About an Estate Plan?
A

Your parents may not want to face the possibility of getting sick, having to give up control over their lives, or even talk to you about a life-ending illness. Parents can also find it awkward to discuss their money. Among those without estate planning documents, the number one reason for not having them was that they hadn’t “gotten around to it.” 

Q
Have You Drawn Up Any Paperwork so You’re Prepared in Case of Illness or Incapacity?
A

Your parents' ability to handle future financial and medical matters may deteriorate. It is crucial that they identify people they trust now, while they are still able, to make decisions for them in the event of incapacity. Now is the time to make sure they’ve done so, and to be involved in the decision-making to the degree everyone is comfortable.

Also, how do they feel about being cared for should they need it? Some parents equate having their children care for them as being a burden on their kids. Think about whether you agree with their notion of the future and what role you are willing to take on. 

Q
What Are Your Priorities for the Future Use of Your Money? What Causes Are Important to You?
A

It’s important to understand that estate planning covers a wide variety of issues including philanthropy. Find out if they have explored gifting strategies to efficiently pass on family wealth. Another question might be about contributing to family educational needs, perhaps for their grandchildren.

Examine what they care deeply about and how your values are aligned. What are their charitable goals? Depending on your family’s wealth levels, you can define family investment and financial goals and objectives. Families with significant wealth may even want to develop a philanthropic policy to direct wealth toward making positive social or environmental change.

Q
Which Other Family Members Should be Involved in the Planning Process?
A

When thinking about estate planning and the drafting of Wills, trusts and the division of assets, a family tree chart can help you build a solid estate plan—particularly in large families. Creating a family tree with your parents and siblings will not only allow you to visualize your family hierarchy, but better understand your parents’ relationships and gain knowledge about all of your relatives. A set plan may help avert conflicts between siblings in the future, as opinions will likely differ on what is best for mom or dad, or how their assets should be divided.

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Footnotes:

1 Source: http://www.census.gov

2 Source: Caring.com 2023 Wills & Estate Planning Study, https://www.caring.com/caregivers/estate-planning/wills-survey

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