Are you one of the many in the U.S. born to baby boomers (born between 1946 and 1964) with at least one parent still alive? That means one or both of your parents are at least sixty and as old as seventy-eight. While one hopes they stay healthy and live a long, high-quality life, what happens if and when they don’t? Increasing age increases the chance of severe illness, disability, and more. Are your parents ready for what could happen next?
Everyone, regardless of age, can benefit from an up-to-date estate plan. Still, realistically, its importance increases as we age. Do you know if your parents have their affairs in order? If not, this can easily become the “elephant in the room.”
This is not a post about how to approach your folks if you don’t know if they have a will. There are plenty of articles you can find online about the variety of ways to broach this topic with them, depending on how you anticipate their reaction. This post simply describes the three possible scenarios and the challenges you might be facing at some point.
Scenario #1
The “head-in-the-sand” situation
Your parent, or parents, haven’t taken any action whatsoever. No will, no healthcare directives, no living will or power-of-attorney. Maybe you are an only child, and they feel everything will go to you anyway. Perhaps everyone is in a silent agreement not to bring it up and to pretend they will live forever.
Actual and Potential Consequences:
· Even if you are the only heir, you’ll likely go through probate court and deal with all that. It’s not fun; it drags things out and can, in some cases, be costly. Your inheritance will be delayed. If you have siblings, there could be all kinds of disputes leading to estrangements between you going forward.
· If your parent becomes unexpectedly incapacitated and they haven’t executed a healthcare directive or living, will you make get cross-ways with the medical staff? They are sworn to “do no harm” and sustain life. For example, they might want your parent on life-support; maybe you don’t think that is what your parent would want – but without a legal document saying that you might not be able to stop it. Or maybe you and a sibling disagree about it – who will win?
· If you (or a sibling or trusted individual) don’t have power of attorney if your parent is incapacitated, the situation can become very complex. For example, you will likely be unable to access your parents’ checking or savings accounts to make payments on their behalf without the legal authority to do so.
Scenario #2
The “I made a will … that’s enough, isn’t it?”
In this case, your folks have taken the time to make out a will at least. Maybe everything goes to you, the only child, or you have siblings, and they want to make sure assets are divided equally (or unequally as they see fit). Maybe the will was created decades ago before much thought was given to other legal instruments that are common today.
Actual and Potential Consequences:
· First, you are better off in this case than in Scenario #1. If the will is still valid and up-to-date, at least you have a guide for distributing your folks’ assets. That can save a lot of time, effort, and sometimes money. But a will only comes into play when the person has died. If they become incapacitated, it doesn’t apply. So you could be facing the consequences described above.
· Even if your parent dies, their will probably would not have helped with life-support decisions.
· If you are not on record with the bank as being a beneficiary of the accounts or your parent didn’t set up transfer-on-death (TOD) or payable-on-death (POD), things can become complicated. It is infinitely easier if everything is in order ahead of time.
Scenario #3
Their estate plan is complete and up-to-date.
Actual and Potential Consequences:
· This is the best scenario of all. Parents who have taken the time to create and maintain their estate plan demonstrate how much they care about their loved ones. Losing a parent is an emotional and stressful time; why burden loved ones with legal and medical hurdles that could be so easily avoided?
So, if you have an “elephant in the room” with your aging parents, I do encourage you to find a way to discuss the potential consequences with them. They may have never thought about some of them and will want to take action to avoid those situations. Ideally, your folks will live long, healthy lives and have all their affairs in order. If you would like to discuss your unique situation for your estate plan or to bring your parents in to do so, please call me to schedule the meeting. I’d be honored to help you and your family. Call me at 513-399-7526 or schedule a consultation through my website at www.davidlefton.com.