Avoid an Unwanted Inheritance with Estate Planning
It never an easy thing to talk about, estate planning and inheritance. Talking about issues that pertain to the end of one’s life or being incapacitated is an uneasy subject at best.
However, recent survey showed that only 42% of adults in the United States have any kind of estate planning documentation in place at all. So, with the number of Americans at the age of retirement close to 50 million and expected to climb as Boomers retire in the next 20 years, there is a huge risk of accumulated wealth to be transferred from one generation to another smoothly.
There needs to be a plan in place. Adults with older parents need to establish a line of communication with them about the future of the families wealth and financial freedom.
4 Questions That Must Be Addressed when Estate Planning
1. Which family members should be involved in the planning process?
When addressing a division of assets and wealth a graph showing an illustration of the family tree could help in establishing a plan that won’t need to be adjusted in the future. It will not only allow you to understand what your family looks like, but will also help you know all your relatives and their relationship with your parents better. When it comes to wills and the probate process, there will be many opinions and conflicts on how assets should be divide. A solid plan put in place well in advance of a situation may help avoid this in the future.
Important financial concerns should be left to professional financial advisors as they can sometimes be emotional and complex. You should refer to your favorite to explain more about that process.
2. What’s important to you?
Only your parents know what’s important to them when it comes to the future use of their money and the causes they wish to support, even after death. Grandchildren’s education and financial contributions should also be taken into consideration.
Gifting and other forms of philanthropy should be explored and laid out in the plan. A serious consideration should be given to what you’re parents charitable goals look like. You’re inheritance should not be all about you, as much as you may or may not think so.
3. Have you spoken to an attorney about the estate plan?
It may be something no one wants to talk about but getting sick or even life ending illness is a real possibility. One’s wealth and money is also a bit awkward at times for your parents have a conversation about. Some even find it a bad omen to discuss your own demise. Many are just simply procrastinators and “just haven’t got around to it”. The fact of the matter is this could apply to the children as well not wanting to appear eager or self-indulgent.
The truth is, it’s important for both sides, parents and children, to plan for this transition of wealth to avoid the probate process and a contested will. Families have been torn apart over the unprepared transition of wealth and the only winner was the attorney’s. A well organized plan will allow for your parents to control their assets until the time comes that they can’t.
4. Has any living will or trust been set up so you’re prepared in case of illness or incapacity?
It is imperative that your parents identify who they trust now, without a doubt, to make the crucial decisions if they were ever to be incapacitated. Their ability to make financial and medical decisions may deteriorate, and at a rapid inopportune pace.In order for everyone to be comfortable with who will be making the decisions, now is the time for them to determine who it will be.
Something else to keep in mind, you may not want anything from your parents in inheritance. Think about whether you agree with their notion of the future and what you are willing to take on. You can help them visualize the future and what they want so you can help. But the most important thing is to be prepared.
An unwanted inheritance, or a contested will that has to drag through the probate process is not fun and can be very costly at a time in life that you should be able to mourn your loss. Estate planning assists your parents in having their estate in order, especially if large sums of cash or investments are involved. If real estate or investment properties are included it could really get convoluted working it’s way through a long drawn out court process.