What You Don't Know About Your Parents' Estate Plan Can Hurt You

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Do your parents have a will or a living trust?

Of all the proactive steps people can take to feel empowered and in control of their financial futures, having a will is perhaps first and foremost — not to mention that it’s also probably the simplest.

And yet, according to a survey by Caring.com, 44% of American parents with a child living at home don’t have a will or a living trust. That’s simply irresponsible.

There’s more in the survey that might surprise or even shock you. Look at these results:

  • 27% of parents don’t have estate documents in place, and 16% of adult children are unsure of whether their parents do.
  • Of those who have a will, only 40% have updated it within the past five years.
  • 58% of adult children don’t know the contents of their parents’ wills.
  • 24% of adult children don’t know whether their parents’ wills have ever been updated.
  • 52% of adult children don’t know where their parents store their estate documents.
  • Even for adults 65 and older, 44% don’t know the contents of their elderly parents’ documents.
  • Women tend to be more informed than men about contents of parental documents (49% to 34%).
  • Men are more likely than women to know where the documents are kept (52% to 44%).
  • Adults aged 18 to 49 are the least likely to be informed about their parents’ documents.
  • Of those aged 50 to 64, 29% don’t know where the documents are stored, and 38% don’t know the contents.

Perhaps you’re among those who do know where your parents keep their will. If they keep it in a safe deposit box at the bank, ask them to remove it because that’s one of the worst locations. (Upon death, banks seal those boxes.) Wills and other estate-planning documents should be stored in a fire- and theft-resistant safe at home — with copies given to the executor and trustee.

Do you know what your parents plan to do with their assets — who gets what upon their deaths?

You might feel that it’s none of your business and therefore you don’t want to ask. But as a potential heir it is your business — and you need to find out. Why? Because if you find out after they’re gone, there are likely to be questions no one can answer. Ask those questions now, while you still can.

In addition, parents often make provisions in their wills based on wrong assumptions about what their children might want or prefer. Wouldn’t it be better if they knew that none of you really wants their vacation home or coin collection? Resolve such issues now to prevent future misunderstandings and financial hassles.

So if you’re among those who don’t know whether their parents have a will or trust — or what’s in it — now’s the time to find out.

And while you’re at it, make sure you have a will and possibly a trust yourself — and update it regularly. To get started, contact an estate attorney. If you need a referral, just contact us.

Originally published in Inside Personal Finance August 2015

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