Talking With Aging Parents About Estate Planning Strategies

Mom and Daugther

Generation X and Baby Boomers are not only growing older themselves, but also are increasingly caring for aging parents. Among the many factors to consider is how to help parents deal with important financial matters, which can be a complex and emotional process for everyone involved. Elderly parents may not like thinking about their own death, and adult children may not want to infringe on their parents’ independence, seem greedy or appear focused on themselves. The discussion is inevitable, though, and it’s better to have it sooner rather than later.

Here are five things to consider when helping your parent(s).

Choose a family representative. If you have siblings, decide who will take the lead. Although intentions may be good, group efforts without a leader often falter. You might select the person with the most financial knowledge, who is accustomed to dealing with legal matters, or who simply feels willing and able to take on the responsibility. In my family, for example, my sisters and I are caring for our mother, but as a financial advisor by trade I’ve taken the lead.

Begin the conversation. As with any topic that involves complex emotions, the hardest part of estate planning tends to be getting the conversation started. It’s important for both parents and adult children to understand the need to plan for a smooth transfer of wealth within the family. An estate plan takes into consideration current tax laws and can help your parent(s) maintain control of their money until they no longer are able to do so.

Whenever possible, have a one-on-one initial conversation about finances with your parent. With the right choice of words, timing and tone, you can open the door to a meaningful discussion. With too many people present, your parent may feel overwhelmed or even threatened. You may want to start with a story about a person you know in common, or a news article you can show them. You might say, for example, “Have you seen the new Social Security statements?” At the same time, be sure to have a comfortable way to flow the conversation into the topic at hand so it doesn’t fall flat if your parent doesn’t pick up on your cues.

Remember their humanity. Our financial lives are often intertwined with our identity, sense of independence and value as human beings. Getting older often means dealing various types of loss that can be difficult physically, emotionally and mentally. So, when you broach the subject of money, keep your parent’s perspective in mind and be sensitive. They may have deep fears about their independence or losing control over decision making. That tends to show up in concerns about their ability to drive to and continuing to live in their own home.

It’s usually better not to start a discussion about finances during a crisis situation or try to resolve all relevant details in one meeting. Raise questions that your parent can consider for a follow-up conversation. One approach could be, “I’ll stop by for coffee next week and we can continue our talk. Will that give you enough time to think about what you’d like to see happen?”

Take action, little by little. It’s crucial that your aging parent(s) identify people they trust now, while they are still able, to make decisions for them in the event of incapacity. This will likely be the first step you take in helping your parent with their estate.

One way of learning more about what your aging parent has, or has not, already done could be by asking, “I need help with my will. Who did you use?” If they haven’t taken that step yet, find an attorney to help set up a will and legal arrangements, called advance directives, that enable individuals to name alternative decision-makers to speak and act on their behalf. In particular, you’ll want to consider setting up these advance directives:

  • Durable power of attorney: This agreement gives another person legal authority to act on your behalf.
  • Durable power of attorney for health care: If you’re unable to make medical decisions on your own, this document gives another individual permission to make medical decisions for you.
  • Living will/health care directive: In the event of a terminal medical condition, this document authorizes your wishes concerning life support to be implemented. (Health care directives vary from state to state, so check to find out the type of directive your state allows.)

Look in the mirror. As you navigate the sometimes choppy waters of helping an aging parent, consider your own estate planning. What have you done to ease the process for your caretakers when you are the elder in need of assistance? Take this moment in time to streamline and organize your own financial life, such as utilizing automatic bill pay and updating documents, to make things easier in the future. Doing so will likely save your kids or other loved ones from considerable headache and heartache down the road.

Developing a personalized estate plan requires a structured approach that’s consistent with your overall financial goals. Working with a financial advisor, an attorney and other key advisors may provide an extra dose of accountability and encouragement to help you create an estate plan that not only meets an aging parent’s needs, but yours as well.

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Lisa Taranto Schiffer is a founding partner of The Horizon Group at Morgan Stanley and has spent nearly three decades in financial services providing comprehensive financial planning and wealth management. Lisa focuses on working with affluent women who manage their family finances, small business owners, executives and medical professionals who value having an advisor to help them make complex financial decisions.

By utilizing the experience of The Horizon Group and vast resources of Morgan Stanley, Lisa brings strategies and solutions to assist clients in many aspects of their financial lives, sharing compassion and insight while helping empower their clients to fulfill the future they envision.

Shortly after receiving her Bachelor of Science from Syracuse University, Lisa began her career in finance with some of the most recognized financial firms in the industry. Lisa currently serves on the Board of Governors for the Buckhead Club, and The Women’s Giving Circle sponsored by the Woodruff Arts Center. In her community, she has served as a trustee of the Temple Beth Tikvah Board of Directors and Mothers and Daughters Against Cancer. Lisa serves on both the Morgan Stanley Atlanta Perimeter Complex Diversity and Inclusion Council and the Women in Wealth Atlanta committees. She is also a member of the Atlanta Rowing Club.

Lisa Taranto Schiffer is a Financial Advisor with the Wealth Management Division of Morgan Stanley in Atlanta, GA. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Information contained herein has been obtained from sources considered to be reliable, but we do not guarantee their accuracy or completeness. Morgan Stanley and its Financial Advisors do not provide tax or legal advice. Morgan Stanley Smith Barney, LLC, member SIPC. NMLS# 1285282.

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