Helping parents create an estate plan

As an advanced planner and former practicing trust and estates attorney, I talk about death almost every day. But when it was time to talk to my own parents about their end-of-life plan, my experience with the topic didn't make it any easier.

I am from a traditional blue-collar Italian family. My parents spent 4 decades living in the same house in Staten Island where my sister and I were raised. Years ago, they created basic estate planning documents, like a will, powers of attorney, and health care proxies, which would enable others to make financial and health care decisions on their behalf if they became incapacitated. My sister and I had discussions with my parents about how they would want us to handle matters, and who would be the best people to make those decisions.

A few years ago, my parents decided to sell their home and move to a one-story home in New Jersey, closer to me. The home I grew up in had many stairs to get up to the main floor and many stairs to go down to do the laundry, so they felt that it wasn't practical to stay in as they aged. Many estate planning laws are state-specific, so if you move to another state, it's important to redo your documents. In addition, our family dynamics had changed, and my sister no longer wanted to be involved in handling my parents' affairs. I told my parents it was time for us to have another talk.

Starting the conversation

From talking to clients, I know that people have very different comfort levels discussing their finances with family members, especially the older generations. Many clients have told me that they are not willing to discuss with their family what their wishes are because they don't want them to know how much money they have.

If you think your parents may be reluctant, my suggestion is to approach these discussions from the perspective of telling your loved ones that you want to help them by understanding who they would want you to call and what to do if something happened. That way, you're making it about the emotional and practical side and not the financial side. You can also ask them to make an inventory of their accounts—without any numbers attached—so you know what the accounts are and where they are, but you don't need to know how much is in them.

And some families might find it hard to find the time to gather everyone together. I have an 80-year-old client who says she always has family money talks at Thanksgiving, because that's the only time she can get all her family members in the same room. Not that I'm suggesting death and money talks need to be a part of the Thanksgiving meal—personally, I'd rather be eating turkey!

Fortunately for me, my parents are very open and have no problem sharing their finances. But when we talked, I realized there was a lot I still didn't know about their plans. I learned that they had strong feelings against being kept alive on machines. I learned that they are struggling with burial and cremation. Traditionally, cremation isn't allowed in the Catholic church, and we've spent many weekends visiting burial sites. But they haven't bought burial plots because they still aren't sure what they want to do. I also learned new things about their finances, like the fact that my father had owned shares of stocks in a small company for decades.

The brown accordion folder

As part of the conversation with my parents, we talked about where their important documents were located. I don't think I can emphasize enough how important this is. Incredible as it might seem, I've seen people go through the whole process and expense of creating their estate documents only to stick them in a drawer where no one knows about them. One time a client shared with me that she had millions of dollars in original stock certificates in a breadbasket. I've thought about that story many times, knowing how often executors shred tons and tons of paperwork. Her executors might have shred millions of dollars simply because they did not know what the papers in the breadbasket were. That's why I reiterate to clients—no matter how good your estate plan is, if no one knows where to find anything, it's a bad estate plan.

In my parents' case, my mother is the classic "unengaged" spouse who doesn't pay attention to household finances. Growing up we lived on a budget. Before my mother started working, every Friday my father gave my mother a check for her to cash and use for the weekly expenses and that was the extent of her knowledge of the finances. I know if something happened to my father, she would find it overwhelming to handle money matters. My father, on the other hand, worked in accounting—he's someone who takes notes on lined graph paper—and as you might expect, has all his paperwork meticulously organized. My dad showed me the brown accordion folder with a purple folder inside it that says “Death” on it, where he had notes on where to find everything. Nowadays you can also store your key documents in an online cloud-based storage and assign access to a trusted person. Whichever method you choose, what's most important is that your family members know how to find what they need.

Finding the right people

It's really hard to think about your parents' demise. Our discussion was very emotional, especially as we considered who would carry out my parents' wishes. My mom had named me as her health care proxy, and I had to tell her that I couldn't do it. I just don't have the backbone to make the kind of tough decisions that would be necessary. That's another important part of creating an estate plan—figuring out who would be the best person to implement each piece of it. Right now I am named as their power of attorney as well as the executor of their will. Most likely my husband, who my parents adore and trust implicitly, will take on the role of health care proxy.

One piece my parents haven't entirely figured out is what they want their legacy to look like. They couldn't pay for most of my college education or law school, so I took out loans, and they have a real desire to help their grandchildren with college tuition, so they don't have to do the same. Their legacy is still an ongoing conversation. I am sure my children, their grandchildren, will be a part of any conversation we have but beyond that they are not entirely sure. I told them to spend it and enjoy it but for savers that is not always a viable option. But whatever they decide, I'm here for it, and for them. As long as I know what my parents want, if I can't be the one to help, I'll find someone who can.