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Few conversations can be harder to have with your parents than asking about the plans they’ve made for their death. Even in the healthiest parent-child relationship, broaching that subject can feel like tempting fate to you – and courting fate to your parents. Money issues can be the messiest, calling into question your reason for asking and your parents’ reasons for the decisions they’ve made – especially if you have siblings.
Popular culture, news events and even local happenings can give you the excuse to open that conversation in a nonthreatening way. Word of a natural disaster with fatalities, an elderly family friend moving to a nursing home or a sudden death of a seemingly healthy celebrity can give you a reason to casually say, “If something like that happened to you, how will we know what to do?”
Your parents might respond that it’s all in their will. That’s great, but a will is read only after a person’s death and even then, usually weeks or months later. Ask your parents if they’ve written a letter of instruction. Sometimes called “death letters,” these documents often wind up in envelopes marked “To be opened in the event of my death” – although situations of disability or serious illness often require the same communication.
Letters of instruction provide critical information for family members in the event a parent becomes incapacitated or dies. They often include the name of key professionals the family can contact, such as the parents’ attorney, accountant, insurance agent and financial adviser, and the location of important documents like wills, insurance policies, legal and medical powers of attorneys, living wills and deeds to property. They may detail how personal possessions not listed in the will should be distributed, or the parents’ preferred or prepaid funeral arrangements.
Adult children often find discussing a letter of instruction easier than talking about wills or estate plans, because their parents don’t have to divulge where their money is, how much there is or where it will go after they die. Instead, the letter of instruction tells the children how to find that information and, in the event of a health crisis, when.
Medical advances have made issues about prolonging life some of the most important that families can share and that parents can document in their letters of instruction. Organ donation and life support usually top the list, but parents, especially those with multiple children, need to detail their wishes for the possibility they can no longer care for themselves. Will one child become the default caregiver? What resources will that child have? Should the parents stipulate they prefer an assisted living or nursing facility to ease the burden on, or prevent resentment among, the children?
Your parents have been in the position of giving you instructions before. Ask them to do so again, in writing. Conversations about their wishes or instructions can lead to more detailed discussions about wealth. The key to those more advanced discussions is to approach them from the same direction: “How will I know what to do for you when you can no longer tell me?” Then you can learn the financial resources your parents have available to pay for prolonged medical care or a residential facility, for example. By focusing on the assets and resources your parents have to pay for their needs – instead of what they’ll have left to give you – you can learn more about your parents’ wealth without feeling like a vulture.
Written by Securities America for distribution by David Younis, CFP®.
Securities offered through Registered Representatives of Securities America, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc., a Registered Investment Adviser. Tax services provided by Tette, Ingersoll & Co., CPAs, PC. Allied Financial Partners and Tette, Ingersoll & Co., CPAs, PC are not affiliated with Securities America.
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