My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. My posts are blunt, opinionated and even have a twist of humour/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Monday, May 9, 2022

Talking with Your Parents about Planning, Documenting and Meeting on Their Estate

Let’s be honest, talking with your parents about estate matters can be a very uncomfortable discussion. In my experience, this process sadly starts in many cases, when a parent becomes sick or has a terminal illness. This is very unfortunate and not the best time to start estate planning.

This parental discussion has a fair bit to unpack, as there are three component pieces. The planning component, which some parents do not undertake. The documenting element, which is often not done or incomplete. Finally, there is the family meeting which occurs infrequently. I will discuss each of these factors separately below.

How to Start the Planning Conversation

Many parents (I will use the plural parents throughout this blog post, but the discussion will apply equally to the "singular" parent) plan their estate without prompting. Others think it will magically plan itself or they just procrastinate as they do not want to contemplate their ultimate demise. In many cases, parents do not think it is their children's business to even discuss their estate planning. 
So how does a child/children raise the estate planning issue without causing their parents to think they are greedy, nosy or rubbing their hands in anticipation of an inheritance? Here are some suggestions I have gleamed from various articles and from my personal experience.

1. This may seem crude, but use another person’s poor planning as a way to start the discussion. Your parents may provide the opening when discussing “the mess their friend Mrs. Smith left her estate in”. Alternatively, you may bring up a bad situation one of your friend’s parents had or use an article in a newspaper or publication that discusses a messy situation caused by poor estate planning.

2. Set-up a scheduled time to meet with your parents and siblings to discuss their wishes for the estate, so that you and your siblings can support their desires. This meeting will hopefully make your parents feel that they are not being ambushed and feel there is a family consensus. Let your parents know specific dollar amounts do not have to be disclosed, which can sometimes be an impediment.

3. Directly ask if your parents are working with a planner. This may lead to an opening and request for a referral, or they may get their back-up. If the latter, don’t pressure them. It is very important to be patient and empathetic. Try again at a later time, maybe when one of the opportunities in #1 present themselves.

4. Flip the situation around and say you are working on your own planning and your advisor has asked is there anything your parents can share with you so that it can be built into your planning. Alternatively, where your parents may not be financially secure, the siblings can say they want to ensure they can help, but need to be able to plan for the assistance (or if the assistance will not be available, they want to help you minimize these financial concerns by planning in advance for such things as a reverse mortgage).

There is no magic bullet to get the discussion started. Maybe one of the above strategies will work for your family dynamics. In any case, ensuring your parents have started their estate planning is beneficial for them and you and your siblings, especially if the children are executors of their estate.

I suggest proper planning includes most of the following:
  • preparation of wills (should not be finalized until the family meeting discussed below)
  • personal care and financial powers of attorney
  • personal and possibly corporate tax planning
  • estate and probate planning
  • introductions to your parent’s key financial, insurance, tax etc. advisors

Documenting Assets and Wishes

Having your parents complete their estate planning is a huge first step. However, if they do not document their assets, wishes, digital passwords etc. they will leave you and or your siblings and the executors a huge mess and a morose game of hide and seek at a time of mourning and distress. I therefore suggest strongly you get your parents to complete an estate organizer or listing of their assets and location. 

The listing will include at minimum the following:
  • location of important documents like will(s) and power of attorneys
  • where the safety deposit key and jewelry can be found
  • details of all bank, investment and real estate information
  • location of insurance policies and details of the policies
  • a summary listing of financial advisors' names and contact information
  • details of digital information from cryptocurrency to Facebook passwords
  • details of any prepaid funeral arrangements and/or wishes in regard to their burial 
There are several estate organizers on the internet or if you have a financial advisor, they will likely have one.

In 2012, I wrote a blog post A Tale of a Fathers Selfless Act of Love. This should act as your guide to the ultimate in planning and documentation. The link to the actual article noted in the blog is here.

Setup a Family Meeting

If your parents have planned and documented, then the final and penultimate task would be a family meeting (if not done as part of the planning). 
Some people suggest a family meeting have a formal agenda, others a less formal tone. In any event, the meeting’s objective is to ensure your parents' choices and decisions are heard in their voice by the family, so there is never a dispute to what you really wanted. 
Your parents can accomplish the following by having a family meeting:

1. Share their spiritual and personal values and hopes for the future of their family (see this blog post I wrote on ethical wills).

2. Discuss their healthcare wishes for all to hear. This would be the time to clarify who the power of attorney is for healthcare and their views on the right to resuscitation and even assisted death. For anyone who watches the TV show This is Us, in a recent episode Rebecca (the mother who has early onset Alzheimer’s) calls a family meeting to discuss who will make her health care decisions and how she expects her family to live and carry on once her Alzheimer’s progresses. I thought this was a great example set by the show.

3. Share their draft wills to determine if their thoughts on asset distribution are aligned with what their children want. Some parents will be open about the will, some will disclose certain information without actual financial details, and some will not want to discuss the will. If your parents have an open discussion about their planned distribution of assets, they may be surprised their perception is not reality. For example, they may have thought the children would want to share the cottage, but only one child even has interest in the cottage and they don’t have the financial means for the upkeep. This discussion can result in changes to the draft will.

4. Discuss any possible perceived or actual inequalities in their will(s) and their rationale. The rationale does not have to be accepted by all, but everyone can now at least understand these were not arbitrary or punitive decisions and could save significant family dis-harmony after their passing.

5. Identify who will be named executors. Most children have no idea of the responsibilities and the burden of being named an executor of the will. Your parents can explain the duties of the executor and determine if the children or child they wish to be an executor(s) are/is willing to undertake the position.

6. Indicate their burial plans and desires.

These are some of the key issues a meeting can address, but the agenda is only limited by what your parents wish to discuss. In the end, the meeting provides a forum for your parents to discuss their wishes for healthcare and asset distributions in their own words and voices; which leaves no room for speculation upon their passing.
Talking to your parents about planning, documenting and meeting on their estate is a tall order. However, whatever you can accomplish from the above list will be beneficial for the estate, your parents and siblings and the executors. 

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation. Please note the blog post is time sensitive and subject to changes in legislation or law.

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