Jim Porter: Estate Planning 101 — lesson one (of five) | SierraSun.com

Jim Porter: Estate Planning 101 — lesson one (of five)

Jim Porter
Special to the Sun

A strange thing has happened in recent years. Many of my friends are having “situations” with their parents. It must be an age thing. I wouldn’t know.

As we get older our parents do too. Interesting how that works. It’s very frightening to see parents “lose it.” They are protective of their role as parents. Naturally, they do not want their kids to see any sign of slippage.

Some of our parents have health issues, sometimes prolonged illnesses, even severe loss of memory and the beginning stages of Alzheimer’s.

Broaching Estate Planning with Your Parents

Parents usually don’t like to talk about their health or their finances (at least their finances), and would never think of discussing their estate plan. If they have an estate plan. If asked, a common response is “it’s none of your business,” or “everything is taken care of.”

But it is our business, and odds are everything isn’t taken care of.

From my observation, more often than not, nothing is taken care of. The will, if there is one, is old and irrelevant, insurance is inadequate or inappropriate, and no steps have been taken to address health problems — from something as basic as stairs in the house that soon can’t be navigated, to a long-term (expensive) debilitating illness.

Parents and kids are unsure how to broach how the parents will be cared for and whether their financial affairs are in order. While it isn’t easy, it must be done.

The father of a good friend of mine who was in the insurance business recently died without insurance and his wife was forced to sell the family home.

If you think you and your brothers and sisters aren’t on perfect terms now, wait until Mom and Dad die without a will or with an obsolete will, or without an inter vivos trust that could help save burdensome estate taxes.

Talking Points – Good and Bad

Here are some suggestions for beginning that conversation with your mother and/or father:

“So Dad, you sure look handsome today. Hey, have you ever thought about your mortality? We all die, so let’s talk about your will. Where there’s a will, there’s a way, and I am your favorite, right? I mean, as the oldest child, you believe in primogeniture I hope.”

Not. Try something like:

“Mom, I bet with the severe decline in the market, like me, you’ve really taken a hit. I wonder if it’s time to reassess your portfolio.”

Assuming there is a portfolio, and they know what a portfolio is. Or try:

“Mom, you know I was reading the other day, on average, families pay (pick a number) 40% more in death taxes when they don’t plan their estates. Wills lose their effectiveness as we age.”


“Hey Pops, have you ever heard of an inter vivos trust where you and Mom are able to put your property in a trust for the kids, which you control and you keep the money; and it helps reduce or totally avoids estate taxes? Maybe we should check it out.”

Use a lead sentence that your parents will relate to. In my family while my Mom did not want to get into a family discussion about her finances, insurance and estate planning, she was more than willing to let us kids talk to her financial adviser and insurance agent.

There’s no simple way to approach your parents about their financial affairs. It’s a touchy topic.

Case Study

Interestingly, my and father-in-law would never discuss their finances with my wife or her brothers, but when I asked, as the lawyer son-in-law, they dug out their will on the spot and we began talking.

It was the beginning of an unfortunate lucky discovery. The fact that my in-laws’ will was over 20 years old was the first sign of a problem. Wills should be reviewed periodically. Much work had to be done with my wife’s family assets — taking steps to avoid taxes and becoming eligible for Medicaid.

It worked. The kids would not have inherited anything if they had not discovered an obsolete will and created a family trust.

Personalize the Approach

Who in the family is best suited to raise the subject with your parents, and which parent is most likely to be receptive? Maybe all the kids should join in the discussion. Or the family lawyer or a trusted family friend could help.

Appeal to what would appeal to them: saving taxes, avoiding probate, preventing a sale of the family home, loss of retirement investments in a declining market, protecting the kids, providing for (or protecting from) a spouse or always a winner: preventing an ugly family dispute.

Next Week

In coming weeks (before the New Year and possible new less-favorable tax laws), we will explore questions to ask your parents, estate planning tools, and charitable giving.

Jim Porter is an attorney with Porter Simon. He may be reached at porter@portersimon.com or http://www.portersimon.com.

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