Written by: Jeremy Shafer

The Boomer generation will transfer an estimated $40 trillion in assets over the next 50 years (ThinkAdvisor).  Without proper planning, the transition will be difficult to administer and tax-inefficient.  Here are five conversations.

Discuss what planning documents they have in place

Estate planning, put simply, is the process of determining where your assets will go and who is responsible for the transition.  In order to have your wishes carried out, you’ll need to plan ahead.  The executor can carry out your wishes, but only if you give them authority with these documents:

  • o   Will & Trust
  • o   General Power of Attorney
  • o   Medical Power of Attorney/Advanced Medical Directive

These are the foundational pieces that most everyone should have in place.

Discuss the responsibilities assigned to family, friends, or fiduciaries

In the opening entry of this series, the difficulties of mixing family and money were highlighted.   Before appointing a representative/executor, consider how your wishes could affect family relationships.  Weigh the relational cost with the financial cost of hiring an independent third-party.  Whatever you do, decide it with ample care and consideration.

Talk about long-term-care (LTC)

Long-term-care may be the single biggest threat to retirement security.  The need is steadily growing, the cost is high and rising, and insurance coverage is a costly proposition.  Discuss expectations with your parents.  Do they expect you to take them into your home (perhaps they did this for their parents) and provide care?  Would they prefer an assisted-living facility?  Are they financially prepared for the cost of assisted-living or advanced medical care (see Genworth’s Cost of Care Survey)?

Balancing independence

Perhaps the most challenging aspect is maintaining their sense of independence.  Directing these conversations without usurping power is a delicate walk.  Continually stress the importance of their wishes being carried out.  When possible, offer your input and insight without making the final decision.  After all, your children may be approaching you in just a few years with this same conversation!

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