Your Estate Matters
Adult children should know about parents' finances
Elderly parents should at least make a list of their financial data to be used after they die
CELEBRATING parents and the love between generations on Mothers Day and Fathers Day can take on a different meaning with aging parents.
It's no longer just a case of gifts, cards and flowers. As parents grow older, their adult children find themselves called upon to step in and assist in all sorts of ways.
For an increasing number of families, the help often starts with small tasks, such as driving to doctors' appointments or taking care of the yard. Over time, the tasks grow as the elders becomes more and more frail.
In other families, there might be a crisis and the incremental help needed by the parents is so great that the adult children become overwhelmed.
For adult children whose elderly parents may soon need assistance or are already receiving assistance, a lot of confusion, stress and anxiety can be prevented if the adult children are familiarized in advance with the parents' estate planning, finances and financial planning.
If you are the adult child, it may be difficult for you to approach the subject of your parents' finances with them.
No one wants to seem greedy or anxious for an inheritance. Your parents may not want to face potential loss of control and their own possible incapacity --- and inevitable death. It can be very hard for your parents to participate in such a discussion.
IF THE interpersonal relationships within the family have been rocky in the past, discussing finances and planning for disability and death could lead to dredging up old conflicts and hard feelings.
While it can be difficult for you to accept the fact that your parents will not be around forever, you will eventually need to "step up to the plate." Facing your parents' mortality as well as your own isn't easy. However, transitions will be less chaotic and easier to handle if you have knowledge of your parents' planning in advance. Assuming your parents do not resist your helpful suggestions, there comes a time when it is appropriate for you to take a leadership role.
In Hawaii, we have many different cultural traditions. If your parents' traditions are such that discussions about money appear to be inappropriate or even forbidden, consider seeking help from a trusted friend or advisor of your parents. Such an individual may be able to encourage your parents to talk with you or with other members of the family.
As elder-law attorneys, we frequently encourage clients to hold a family meeting when it is clear that younger family members will be engaged in helping out their elders.
As a caring child, you want to strike a balance between keeping your parents out of harm's way and respecting their need for independence. The goal is to make plans before a real emergency occurs, just as you would plan in advance for any other kind of emergency such as a hurricane or a fire.
IT IS BEST if your parents have somewhere documented the details of their medical and financial situation, including the names and addresses of their financial and legal advisors. Find out where they keep financial documents such as Social Security numbers, investment accounts, insurance policies, safe-deposit box keys, tax returns, wills and trusts and related documents. If they resist, encourage them to at least make a list of these items and let you know where the list can be found in the case of an emergency.
Determine whether your parents' current financial situation will provide sufficient income for their future needs. Even a well-funded retirement plan can run out of money too soon if it is poorly managed. If changes are needed, the sooner you raise the issue, the better.
Discuss what might happen if your parents can no longer live independently. our parents might not have a plan in their mind, but might have a lingering concern. Talking about it can bring peace of mind.
Life is a journey and the latter part can be much smoother and less perilous for parents if their children are traveling with them.
Attorneys Judith Lee Sterling and Michelle H. Tucker, of Honolulu law firm Sterling & Tucker, can be reached through www.sterlingandtucker.com