What Details to Discuss Regarding Your Parents’ Estate Plan
Many parents haven’t written down their wills; in fact, according to recent statistics, 50 to 60% of Americans don’t have a will. Although, talking about your parents’ estate plan can be uncomfortable, it’s important that you do so. Here are some subjects you should address.
As your parents age, there are various parts of their lives that will change. One of these areas is related to property. If they own a house, for example, their property taxes are likely to increase every year. This is something that you’ll want to stay on top of. If you inherit the house, you may find it difficult to keep up with the property taxes of their house and your own as well.
In addition, you’ll also have to know if there’s still a mortgage on the property. You can also ask if your parents have mortgage protection insurance.
If you have siblings, everyone will need to be involved in the decision-making process. It’s important to determine if all the siblings can contribute to the property tax equally. Remember that not everyone may be in a financial position to take on this kind of responsibility.
Another property-related detail to think about is renovations. Your parents may have lived in the house for years without having done any major renovations. Make a list of any renovations that need to be done, and find out how much each renovation will cost. You may not live in the same city or the same state as your parents, which means that you may inherit property that you don’t particularly want. In this case, selling it quickly may be your best option. If the house is slightly run down and needs work, you and your siblings will need to sink in some money to prep it for the market.
Inheriting a dilapidated house may lead to fights among family members as to who will oversee, and pay for, the renovations. You and your siblings will have to decide whether you want to move into the house, renovate and sell it, or rent it out. These important decisions must be made during the estate planning process with your parents and an experienced estate planning lawyer.
If your parents are leaving you a trust, you should talk with them about the kind of trust they’re setting up and basic information about it. For example, make sure that you find out who will be the trustee of the trust. A custodian must be named who can deliver the trust when your parents are gone.
Another trust-related detail to discuss with your parents is how the trust money will be distributed. Trusts can be distributed annually, they can be doled out when you reach a specific age, or they can be devoted solely towards things like your educational costs or your healthcare. You can better plan your financial decisions if you know the details of their estate planning.
When trusts are divided amongst siblings, who gets what and why can turn into a sensitive topic. If you and your siblings disagree with some of the trust details, a family meeting is a good time to bring those disagreements up in order to settle any differences.
Remind your parents to update their plans every year. Things do change. For example, housing markets may cause property taxes to soar. Also, the person who your parents appointed as a trustee may get sick and die. Moreover, there may be beneficiaries who are no longer alive.
Lastly, your parents’ will is something you should discuss before they pass on. There are assets to consider as well as their belongings. Help your parents make an inventory of all their valuable belongings. Besides a house, items include cars, boats, valuable art, and jewelry. Other assets could be a business, stocks, savings accounts, and life insurance policies.
Your parents’ will should also mention how they want to be cared for after their death. Some people prefer traditional burials while others prefer to be cremated. Medical decisions and who is responsible for making them as they age are important topics to discuss as well.
All these details are an important part of an estate plan, and talking with your parents about their estate planning will go a long way towards making sure everything goes smoothly when they are no longer here.
If you need an estate planning lawyer, contact The Knee Law Firm in Hackensack, New Jersey. Call 201-996-1200 to speak with one of our lawyers today.