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As you think about retirement planning, it is useful to factor in any inheritance you might receive from your parents. Knowing how much to expect requires a broader discussion with your parents about estate planning, a difficult topic to broach because it involves two subjects that are very personal and uncomfortable for most people: money and death.
But families that wait too long to talk about inheritances and related issues may not get to talk about them at all.
"It is so important to discuss estate planning with your parents while they are both mentally healthy," says Jim Collins, a Sarasota, Fla.-based attorney concentrating in estate planning, probate and elder law issues. "If they wait to make arrangements until after one of them is incapacitated in some way, quite frankly, it takes many of their choices off of the table."
So, how do you get your parents—or even the entire family—to start a dialogue about estate planning?
Talking about your own financial situation could be the catalyst for your parents to start opening up about their own estate plans. Your parents may be just as eager to discuss their estate planning as you and your siblings are—but they may not know where or how to begin. They may simply be waiting for you to start the conversation.
Once you learn their wishes, "the reality is that you may not like what your parents choose to do with their money and belongings, but it's their prerogative," says Steve Hartnett, associate director of education, American Academy of Estate Planning Attorneys (AAEPA), San Diego, Calif. "And because estate plans do not always result in people being treated equally, it's very important—to avoid conflict later—that family members know and understand what plans are in place."
Here are a few tips to help you and your parents start talking:
Focus on life, not death
The topics of estate planning and death are, of course, intertwined, but it doesn't mean that death has to drive the discussion—in fact, it's best if it doesn't. "It's a challenge, but you really must get the focus off death alone and on life as well when talking about estate planning," says Collins, who is also a member of the National Network of Estate Planning Attorneys, Omaha, Neb. "Emphasize planning to live well versus planning to die well."
Make your parents—and their wishes—the primary focus of the discussion
"The bottom line is that you need your parents to tell you what they want to have done and who they want to do it," says Hartnett.
He suggests, "You might want to take a direct approach and say, 'OK, Mom and Dad, here's the problem: I'm just not sure what it is you would like me and/or my siblings to do in the event of an emergency. What documents do we need? Where are they located? Who do you want to take care of what?' Tell them you just want to be absolutely clear about their wishes and that you want to ensure that their goals are met."
Emphasize the need for protection—for the entire family
Having an estate plan helps to protect family members "from creditors, predators and the world," according to Collins, who says the last thing that anyone wants to do is "die intestate" (without a will) because it will result in unnecessary heartache and headaches—and legal fees—for their loved ones.
The National Association of Financial & Estate Planning's website sums up dying intestate like this, "[It] is like taking your property and attempting to throw it to your heirs on the other side of a deep chasm, a chasm which is filled with hazards. These hazards (probate, creditors, con-artists, lawsuits, judgments, lawyers, and death taxes) can damage much or most of the value of your estate."
Encourage your parents to seek advice from an expert
By doing so, you are sending a message that you still trust them to handle their own affairs and perhaps making them breathe easier by knowing you don't want to control the situation. Offer to help them with their search for a qualified attorney.
Be patient—and understanding
Realistically, your first conversation with your parents about estate planning is not going to be your last. It may take several discussions before you make even a little bit of headway with them. And even after your parents have some type of estate plan in place, it doesn't mean that the arrangements they made will remain relevant in the future. Think of it as an ongoing dialogue.
Jane Irene Kelly is a freelance journalist based in San Francisco.
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