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Are Your Parents Prepared?
We recently had a conversation with a married couple regarding the wife’s elderly mother. The wife had attended a meeting with her mother’s financial advisor. Only recently had the mother begun to involve the daughter in the mother’s financial affairs.
The advisor had served as the mother’s financial advisor for years and was recommending some significant changes for the mother’s portfolio that after just a few minutes of questioning on our part, seemed ill-advised, at best. The advisor had not addressed his client’s financial needs or tax situation. It appeared to me that the advisor was not acting in his client’s best interest but rather was motivated by the potential fee he would earn if the mother accepted his recommendation.
The daughter and husband asked questions about the mother’s trusts. It was clear to me that they had little knowledge of the mother’s estate plans.
The point of all this is that as your parents age, it’s important for you to have a heart-to-heart talk with them about their estate plans. This is a difficult topic to bring up, but we believe, is a necessary one.
Some of the questions you need to ask include:
(1) Have your parents done any estate planning?
(2) Do they have wills, trusts, powers of attorney, patient advocate forms?
(3) Where are their documents located?
(4) How long has it been since they have been reviewed?
(5) Are their assets titled properly?
(6) Have they considered sitting down with all of their children to review their
estate plans? (Such a meeting can help to avoid disagreements among siblings
once the parents pass on).
(7) Who are the parents' advisors (attorney, financial advisor. accountant)?
(8) How do they wish to distribute their financial assets and personal assets?
(9) Have they made plans for their funerals? If not, what are their wishes?
Once you break the ice and get them sharing information, it may make sense to offer to go with them to update or review their plans with their advisors. This will allow you to assess whether or not the advisors are really acting in your parents’ best interest. Often we hear people describe their advisor in the following manner: “Oh, my advisor is so nice!” That may well be but is he/she acting in their best interest or their own best interest?
The advisor had served as the mother’s financial advisor for years and was recommending some significant changes for the mother’s portfolio that after just a few minutes of questioning on our part, seemed ill-advised, at best. The advisor had not addressed his client’s financial needs or tax situation. It appeared to me that the advisor was not acting in his client’s best interest but rather was motivated by the potential fee he would earn if the mother accepted his recommendation.
The daughter and husband asked questions about the mother’s trusts. It was clear to me that they had little knowledge of the mother’s estate plans.
The point of all this is that as your parents age, it’s important for you to have a heart-to-heart talk with them about their estate plans. This is a difficult topic to bring up, but we believe, is a necessary one.
Some of the questions you need to ask include:
(1) Have your parents done any estate planning?
(2) Do they have wills, trusts, powers of attorney, patient advocate forms?
(3) Where are their documents located?
(4) How long has it been since they have been reviewed?
(5) Are their assets titled properly?
(6) Have they considered sitting down with all of their children to review their
estate plans? (Such a meeting can help to avoid disagreements among siblings
once the parents pass on).
(7) Who are the parents' advisors (attorney, financial advisor. accountant)?
(8) How do they wish to distribute their financial assets and personal assets?
(9) Have they made plans for their funerals? If not, what are their wishes?
Once you break the ice and get them sharing information, it may make sense to offer to go with them to update or review their plans with their advisors. This will allow you to assess whether or not the advisors are really acting in your parents’ best interest. Often we hear people describe their advisor in the following manner: “Oh, my advisor is so nice!” That may well be but is he/she acting in their best interest or their own best interest?
posted by David C. Patterson and Erin Preston at
7:03 PM
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