Ten Tips for Talking to Parents about Estate Planning

By Emily Foy

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It is a conversation none of us will relish but, when it comes to having a financial or estate planning conversation with your elderly parents, there is no time like the present.  A failure to have these discussions can cause significant and long-lasting problems for loved ones after a death and can create a difficult family dynamic at a time when people are already grieving.  Given the complexity of some of the issues, and the need for forward thinking and planning, the sooner you have these conversations, the greater the chances of creating a robust and successful estate plan, both for them and for you.  

Whilst you may find that your parents are also agonising about how to raise the subject with you and be relieved that you have done so, it is a notoriously sensitive issue to broach. We have therefore collated these practical tips from our trusted Hive network of referral partners, including financial planners and advisors, private client lawyers, tax specialists and therapists.

 1.    Introducing the subject 

Think about ways to initiate the conversation, for example: discussing preparing or making changes to your own estate plan, sharing or mentioning a useful news article or feature or attending a family event which might help to start the process. The illness of a close friend or family member can also prompt the discussions in a gentle manner.  It is sensible to broach the subject gently and to arrange a more detailed conversation for a future date, to give everyone the chance to think about what they want to say.  

 2.    Focus on your parent(s) wishes

 Perhaps the most important thing is to focus on what your parent(s) wish to achieve, not what you might consider the best outcome, to avoid inadvertently causing your parents to question your motives. Once you know their ultimate aim you can work with them to establish how best to achieve these goals.

 3.    Involve the whole family

Try and make sure all relevant family members are included in discussions and decision making where possible.  Involving the whole family may help to ease or diffuse any tensions surrounding these conversations and might help address any issues which could occur down the line at an early stage.  Different family members may also have creative ideas or solutions to any problems that are envisaged.

 4.    Encourage your parents to record their wishes

Anything that can be recorded will assist loved ones. If your parents do not wish to discuss things as family, encourage them to at least record their wishes in writing and explain how this will make things easier for their children and loved ones after their passing. Ideally this would be done in a formal document but even a signed letter might help provide guidance for family members after they have passed away.

 5.    Consider practical ways you can assist your parents

Even if your parents are unwilling to discuss the details with you, think about ways you can make things easier for them to record their wishes, such as helping to find them an advisor to enable them space to think about what they wish to achieve or researching options and providing them with guidance as to how to take these steps themselves. Ask them if they already have any advisors and offer to assist them with finding these experts, if they do not.  

 6.    Educate yourself and your parents

It is imperative that both you and your parents understand what happens if someone dies without leaving a Will, both in terms of who will benefit from their estate after their death and the tax implications arising from this.  Our experts at Apiary have prepared this helpful article which sets out the reasons for making a Will here. Apart from the ability to choose who you leave your property to, it is also advisable to take advance of any tax savings that might be available in accordance with relevant legislation. Your Apiary expert can connect you with a lawyer or tax planning expert to advise you of your personal circumstances.

7.    Practical arrangements

Consider the future practicalities in caring for your parents on a day-to-day basis, as well as what their wishes are in relation to their assets. Think about where your parents would like to live if they are unable to live independently, and whom they would like to care for them. Consider whether you need to prepare Powers of Attorney, nominating individuals to make decisions on behalf of your parents, if they are unable to do so.  Our experts will happily guide you through the process and discuss your options, which will vary dependent on your place of residence and personal circumstances.

8.    Make a will!!

If an estate is likely to attract tax charges, there are various options in terms of how your parents can plan their finances, not only to ensure that their assets go to the person they would choose, but also to help to reduce any potential tax liability.  A Will underpins all other inheritance tax planning and, therefore, the first step should always be to prepare a Will documenting a person’s intentions. Whilst each jurisdiction usually has legislation to determine how an estate passes when a person dies without a Will this will not necessarily include all family members (for example, step or adopted children may be left out depending on the jurisdiction and cohabitees are often entirely excluded) and it is important a Will is drafted to ensure all intended beneficiaries actually benefit from an Estate.

9.    Don’t forget gifting

It is not just assets in a person’s estate on their death which are subject to tax, but sometimes assets that they have gifted away before their death may also be relevant. If affordable, it can be sensible to consider gifts at an early stage, even if your parents are young and healthy, to avoid a future tax burden.

10.  Be available to talk

Estate planning can be a difficult subject to think about, so even if your parents initially appear reluctant to have these discussions, make sure they know that you remain there to talk to them and support them when they are ready.

No-one likes to think about the death of a loved one, but a little sensible and sensitive intervention now may save immense heartache in the future.

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