Many parents may feel it is
unnecessary to inform their adult children about their personal and financial
affairs. However, as your children grow older, it can work to your
advantage—and that of your entire family— to share with them key financial,
medical, and estate planning information. Awareness of important
information, and knowing where to locate relevant documents, can help your
grown children take appropriate and timely action if a sudden death or
catastrophic illness were to occur. Consider these issues:
Health Insurance
If you are age 65 or over,
your adult children should be aware of any and all health insurance policies,
as well as Medicare materials. There may be “Medigap” policies
that go beyond the basic care coverage provided by disability income
insurance policies and long-term care (LTC) policies. You may
benefit greatly in an emergency if appropriate procedures are followed and
necessary forms are submitted in a timely manner.
Living Will
This document specifies an
individual’s preferences regarding the administering or withholding of
life-sustaining medical treatment. Under many state statutes, a patient must be
considered “terminal,” “permanently unconscious,” or in a “persistent
vegetative state” before life support can be withdrawn. Copies of living wills
should be made available to anyone who would be involved with the care of
either parent, and the originals should be kept in a safe, readily accessible
storage place.
Health Care Proxy
Similar to a living will,
this instrument allows you to appoint another person as your “agent” to make
health care decisions in the event you become incapacitated and unable to make
your own decisions. Specific directions regarding medical procedures to be
administered, withheld, or withdrawn can be made within the document. A copy
should be readily available to the “agent.”
Durable Power of Attorney
for Property
If you become disabled, who will manage your financial affairs? With a
durable power of attorney in place, an individual or bank may act as an agent
to oversee your financial affairs. Your grown children should know what steps
have been taken to ensure the competent direction of your affairs, should the
need arise. However, your children’s actual involvement with your affairs can
be limited, if so desired.
Wills
Do they exist and are they
up-to-date? The exact contents can be
kept private, but the location of
your will should be known by all family members.
Trusts
Wills can accomplish much
in the direction of your estate after your death. However, a trust managed by
yourself, or a trustee of your choosing, may meet your planning needs,
including potentially protecting the estate from taxation. Trust documents
should be kept with wills for ease of access, and you should discuss
pertinent terms with those who will be involved. As your children reach adult
age, it may be time to select a responsible child to serve as a trustee in the
event of your death.
Life Insurance
Life insurance is typically
purchased to provide cash to help cover mortgages, liabilities, expenses, and
estate taxes, as well as to benefit your loved ones. Knowledge of the existence
and whereabouts of life insurance policies can be of critical importance. A
policy locked in the deceased’s safe deposit box cannot accomplish the aims for
which it was intended.
List of Assets and Debts
Once again, adult children
may know of the existence of lists of
assets and debts without seeing the actual lists themselves, unless you so
desire. An asset list—developed and updated regularly—should
include information concerning all bank accounts, real estate holdings, pension
holdings, annuities, business agreements, brokerage accounts, documentation
concerning boats, cars, works of art or other valuables, collectibles, and
insurance policies. A debt list should include information
pertaining to current mortgages, consumer indebtedness, personal loans, and
business obligations. Both lists should provide complete information on where
associated paperwork and files can be found.
Planning for death or
disability can be difficult. However, leaving your grown children uninformed
about your key financial, medical, and estate planning information can result
in confusion and delay at a time when clarity and timeliness are of the
essence. At first glance, these preparations may seem burdensome. However, once
completed, both you and your children can rest assured that your affairs will
be properly managed if needed.
