Planning

» First, it is important to understand that your parents may not want to share any of their estate planning information with you and, if that is the case, you should respect their wishes. However, if your parents are open to discussing the topic, here are some questions you might want to discuss:

Have your parents DONE ANY ESTATE PLANNING?

The three basic documents that every individual should have are a will, health care directive and a power of attorney.

Have they been UPDATED or REVIEWED RECENTLY?

It is a good idea to have your estate planning documents reviewed with an attorney every three to five years.

Where do your parents keep their ORIGINAL ESTATE PLANNING DOCUMENTS?

When your parents’ documents are needed, it is important to know where they are, or who to contact to get them.

With respect to wills, there is only one original. Things can be more difficult than necessary if an original will is lost or damaged, so it is important that the original is kept in a safe place. I often recommend that my clients send their original wills to the county recorder for safekeeping. The wills are kept safely and securely in the county’s vault.

Your parents’ health care directive should identify their wishes if they are in a terminal condition and cannot act on their own behalf. It should also state who they designate to act on their behalf with respect to medical decisions. It is important that whoever your parents have named in this document is aware of it and, even more so, is aware of your parents’ wishes.

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Think about it. Do you know if your parents want life support? Do you know if they want to be cremated or buried? If cremated, do they have any specific wishes as to the handling of the ashes? Do your parents want to be organ donors? Do your parents’ doctors have a copy of their health care directive? While these aren’t everyone’s favorite topics, having this information makes things easier when the times comes.

If your parents aren’t willing to share their documents with you, they may be willing to provide the contact information for the attorney who prepared the documents, so you know who to contact when your parents are in poor health or pass away. Attorneys are bound by confidentiality rules that will not allow them to share information with their client’s children without having a legal right to the documents or the required consent from your parents.

If you are to receive an inheritance, WILL THAT INHERITANCE BE OUTRIGHT or IN TRUST?

This is a topic your parents may be less willing to discuss, but it is still important. There are many reasons to leave assets in trust for children. Trusts may provide greater asset protection for a child who gets divorced or has creditor issues than if the child receives their inheritance outright. In addition, trusts can provide potential tax savings if the child has a taxable estate of their own.

However, trusts aren’t always necessary, and if the inheritance is to be distributed to a child in trust, it is important that the parties know both the advantages and disadvantages. Keep in mind, it’s important to recognize that this is your parents’ decision, not your decision.

Are your parents aware of the NEW TAX LAWS RELATED to GIFT and ESTATE PLANNING?

For 2018, the federal estate tax exemption doubled to $11.2 million for a single person or up to $22.4 million for a married couple with proper estate planning. Also, the annual gift tax exclusion increases from $14,000 to $15,000 per individual or $30,000 for a married couple.

Of course, estate planning can be a difficult topic to discuss with parents, and I can’t stress enough that whatever your parents decide, the decisions on what to share is completely their decision to make. But, at a minimum, I believe it is important to have the contact information for your parents’ estate planning attorney. Dealing with a parent’s health issues or losing a parent to death are some of the most difficult things a child will ever experience. Having these discussions while your parents are still healthy and have sharp minds can be extremely beneficial and eliminate much stress down the road.

JESSICA

FOSS is an estate planning attorney with Fredrikson & Byron and full-time mom of three. She’s a regular resource for Fargo media on estate planning topics. You can contact her at jfoss@fredlaw.com.