Many parents may not fully appreciate how important it is to inform their grown children about their financial and personal affairs. In the event of a sudden death or catastrophic illness, it can benefit you to have adult children who are familiar with your key financial, medical, and estate planning information and can quickly locate the relevant documents. By discussing the following matters with your family, you can help them take appropriate and timely action, if needed:
- This document directs the disposition of your assets after your death. It is important to update your will as major changes in circumstances occur. Although close family members should know the location of your will, you need not reveal the exact contents. It is best not to store the original in a bank safe deposit box, since this could be sealed at your death. However, you may wish to leave it with your attorney, with copies provided to the appropriate family members.
- Many people establish trusts to help minimize estate taxes or to avoid mismanagement by those who might lack the prudence and skill to handle matters as you would wish. Trust documents should be stored with your will for ease of access. You may also wish to select a responsible adult child to serve as a trustee in the event of your death.
- Durable Power of Attorney for Finances. This document allows you to designate an individual or an institution, such as a bank, to manage your financial affairs if you become disabled. It’s important to let grown children know what steps you have taken to ensure the competent handling of your affairs, although you may choose to limit their direct involvement with your finances.
- 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be considered “terminal,” “permanently unconscious,” or in a “persistent vegetative state” before life support can be withdrawn.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. This instrument goes hand in hand with a living will and allows you to appoint someone as your “agent” to make health care decisions should 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 Specific directions regarding medical procedures to be administered, withheld, or withdrawn can be made within the document.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 your appointed agent.
- Health Insurance. Inform your adult children of all your health insurance policies, including Medicare and Medigap In an emergency, you will greatly benefit if appropriate authorization and claims procedures are followed and the necessary forms are submitted in a timely manner.
- Life Insurance. Life insurance is typically used to provide a ready source of cash to help cover mortgage liability, estate taxes, and other personal and business expenses, as well as to benefit loved ones. It can be critically important for family members to know of the existence and whereabouts of any life insurance policies. A policy locked in the deceased’s safe deposit box cannot accomplish the aims for which it was intended.
- List of Other Assets and Liabilities. Prepare and regularly update a list of your assets and liabilities. Inform your adult children of where this list is located, although you don’t necessarily need to let them in on the details. The assets should include all bank accounts, real estate holdings, pension holdings, annuities, business agreements, brokerage accounts, boats, cars, works of art or other valuables, and collectibles. The liabilities should include current mortgages, consumer debts, personal loans, and business obligations. The list should also identify where any associated paperwork and files can be found.
It is never easy to plan for death or disability. However, leaving your grown children in the dark about your key financial, medical, and estate planning matters can result in confusion and delay at a time when clarity and timeliness may be of the essence. Though these preparations may seem burdensome at first glance, once you “fill in the picture,” you and your children can rest assured that your affairs will be properly managed according to your wishes should the need arise.