Talking to aging parents about death and their estate can be very hard, but it is a fact of life unless you predecease them. A worried Internet forum member asked about planning for a family member's death, especially as they age.
Depending on the specific situation, this information could help deal with other deaths in the family, such as siblings, cousins, aunts, and uncles. These are some great suggestions on the needed paperwork and the details you must include when discussing estate planning with your family.
1. Good Planning
A commenter discussed how their mother-in-law's excellent planning ensured the state would quickly transfer her estate to her designated heirs. She included all her essential legal documents like her birth certificate, social security info, and marriage and divorce paperwork. She remembered to have her car title, insurance information, a list of credit cards, a medical power of attorney, and last will in a binder.
This woman was prepared and added her life insurance policy and the document outlining her pre-planned funeral and added her kids to her bank accounts and medical forms as contacts left her doctor's number on the fridge and, finally, transferred the deed to her home which was an act of absolute trust.
2. Know The Details
Some parents have gotten a head start on planning but have not included crucial details that might make the process more difficult. You have to ask your relatives for the passwords for their home computers, laptops, email, and all other critical online accounts. Heirs need the keys to mailboxes, locations and access to safe deposit boxes, and documents like car titles and lists of assets, liabilities, and people they want to be informed about in case of death or incapacitation.
While you shouldn't pressure your relatives to do this, you can remind them that if they want their wishes respected, it would be helpful to give you the ability to do what is needed.
3. Access to Online Accounts
Several people had an issue with not having the necessary password access when a person died. This idea is a potential solution to that issue that could make parents feel more secure in passing those secrets on at the proper time. Please set up a family account with 1Password or another comparable service to create a vault only they can access. Then the parent can dictate the notes for vault recovery in their will or make a designated person an account administrator.
They can also write secure notes that describe how to access other assets and include them in the private account.
4. Cell Phones Are Important
Security technology on cell phones has grown by leaps and bounds. Our phones are much more secure than they used to be, which is good but presents a problem to estate planning. Remember that you must be able to access cell phones in estate planning, and it is too easy for a cell phone to be locked and the data inaccessible. A great tip for dealing with this is to ensure your relative gives you access to their cell phone.
You can store their passcodes somewhere safe and keep them just in case. Two-factor authentication is a necessary safety measure but can make it nearly impossible to access certain financial accounts if you cannot unlock a phone. Making sure that at least one trusted person has your password is essential. It is a necessity for people of every age. One person told a story of how their sibling ended their own life when they were young, and since no one had the password to his phone, it was a difficult situation to resolve.
5. Be Prepared With A Will and Trust
Another option is for parents to establish a trust, in addition to their will, that will dictate the terms for the disbursement of all of their assets. This option gives the parents total control, and they can designate executors and put their children in charge in an order that makes sense to them.
Talk about security. One parent told of all the legal and financial documents he stores on paper in a secure binder placed in a fireproof safe and frequently updates information as it changes. He also programmed his phone with emergency contact icons beside his children's names. You can show examples of parents who have provided this information for their end-of-life planning to convince parents who may be reluctant to divulge information.
By choosing to be proactive, this parent has secured his children's future and made sure that they know, right down to the smallest detail, how he wants his progeny to deal with his estate. This example could make parents feel more secure and less like their children want to take control of what belongs to them.
6. Be Aware of Your Parent's Insurance Policies
This person's story highlights the importance of getting this information in case your parents need that help. Children can help their parents with decisions about medical care when they may not be coherent enough to do it themselves.
A commenter's mother had been paying into long-term care insurance for a decade. When she became ill, it slipped her mind to make a claim, and 15 months passed without the mother claiming the benefits she paid for. The insurance could have been used to pay for medical services, which is why you pay for insurance in the first place, and this woman sadly lost 80% of her benefit total by not putting in a claim.
If her children had known about the policy, they could have helped her claim her benefits. She died five months later, and her son wished she had told him about it. It might have made a difference in her care and comfort. It's not just what happens after they pass.
7. Bank Account Closures
Many people may not know how the government handles bank accounts after a family member's death. When someone passes, the funeral home typically notifies the Social Security Administration, which will tell the deceased's bank. This standard procedure means that the bank account will be closed by the bank as soon as they are informed. A person who learned this after their parent passed away wanted to let people know how difficult this can be.
The bank will then disburse the funds to the deceased heirs, but since the bank account is frozen, the checks are worthless. The heirs must establish a special estate account to close the necessary banking. To do this, you must get an appointment and meet with a deputy from the office of wills that certifies and name an executor.
It is a time-consuming process that must be done during a time of unpleasant grief. This process could have been avoided entirely if another family member had been added to the account before the death.
8. Go Through The Bills
Another fantastic suggestion is to ask if your parents would be willing to review their bills with you. This action is helpful in case of incapacitation or to verify whether or not they are paying too much for services.
Also, it shows that you care about them and are willing to help. One example is how a son discovered that his mother could have saved at least $75 from her cable bill and $45 on her cell phone plan. While it might not seem like a lot on its face, it could have saved $600 a year, which is not insubstantial.
You can also take the time to go through paperwork like insurance policies, like life insurance, long-term care insurance, and disability insurance, to ensure that they aren't paying too much and to make sure that you know how these policies work, in case you have to deal with them at some point.
9. Power Of Attorney
Power of Attorney is a powerful tool, especially for the children of aging parents. It allows designated agents to make decisions on your behalf should you be incapable of doing so. It can be crafted only to enable that power for specific tasks or a certain amount of time. People can choose who they want to act as their agent and make those decisions. This gives them the freedom to know that they will be cared for by someone they trust.
You can also set up a springing power of attorney that only takes effect when and if someone is no longer competent. This could work very well as end-of-life planning.
10. A Doctor's Note
To plan ahead and for all eventualities, you can have a doctor or other medical professional sign a letter that attests to your parent's sound cognitive ability to make the decisions just in case distant and greedy relatives challenge any pre-planning. Several users noted that they had similar issues with relatives they barely knew making claims on their parent's estate from out of nowhere.
A wise forum member also stressed the importance of having multiple copies of the requisite documents. Again, it might sound like an extraordinary situation, like something from a movie. Still, one commenter said that the copy of their parent's end-of-life documentation was stolen by a relative and returned by her husband, who didn't feel that what she did was right. They were lucky, so the person made sure to want everyone to know that this was something that had happened in real life and that it helps to make copies because you never know what people will do.
11. Investment Accounts
For children who have parents with investments, here's a tip on how you can deal with those investments relatively quickly. An experienced person stated that brokerage houses and other financial institutions that manage accounts like 401ks allow the person with the account to designate a beneficiary who will receive the funds from a deceased person's accounts.
The will does not cover this, and the disbursement happens when the financial institution gets a death certificate. Each brokerage or bank's name for the beneficiary is sometimes different, but the basic idea is the same. Parents need to be notified of and understand this to make things easier in the long run.
This thread inspired this post.