No family wants to address the elephant in the room, but the discussion needs to start somewhere. Are you adequately prepared to handle things when confronted with the death of a parent? Have you sat down with your parent(s) and talked about the basics? Where are their estate documents located (wills, trusts, medical powers of attorney, etc.)? Do you even know whom they have named as executor of their estates? These are the seemingly simple questions that seem to get so messy once the discussions begin.
Here are some basic steps to take to make it easier once the time comes:
- Get your parents to share digital logins and passwords for their online banking, investments, and email. Ask what they would like you to do with any social media accounts once they have passed.
- Understand what monthly household bills to expect and whether electronic or paper invoices are received so you can keep the household running until the estate is closed.
- Make sure cash is available to pay these monthly expenses until the estate is opened. Investment accounts are frozen once the custodian is notified of the death.
- If you are named as executor or trustee, educate yourself on the duties and responsibilities of each role. These are big responsibilities and very time consuming. If you are not up for the job, consider passing the role to the successor.
- Let the dust settle before dividing up any family treasures. Many decedents do not specify how their personal property should be passed on and leave it up to their heirs to divide. This does not always end well. Let heirs have time to process emotions from the loss of the loved one before deciding who gets what. Remember time heals all wounds.
- Keep in mind that this process doesn’t happen quickly. Closing an estate may take up to 18 months (and sometimes even longer).
- Don’t forget the human element. As you work with the CPA to file tax returns, the financial advisor to change investments, close bank accounts, plan a funeral, etc., remember to share with younger generations what made this family member special. What family traditions need to be passed down? What stories need to be shared?