One of the Best Gifts to Give That No One Wants to Talk About
By Janet Lomax
'Tis the season for gift giving.
One of the best presents you can give to your family is the gift no one likes talking about: pre-planning for death.
The subject matter may sound “dreary” or “too heavy” for this time of year, but just taking the first step in discussions with your family can help alleviate many problems that can occur when there is a death--your death-- in the family.
A national survey by The Conversation Project last year found 92 percent of Americans know the importance of discussing end-of-life care, but only 32 percent of them had actually discussed it.
When my parents passed away, one of the best things they did for their children was to have their financial “house in order.”
We knew where to find the will, important financial and personal documents. We knew the name of the attorney, the accountant, and who the executor would be. We had information about their life insurance policies. My parents even pre-planned and paid for their funerals and burial vaults. My sister and I had already been added to certain bank accounts and had check writing privileges. Despite our great sadness during our time of bereavement, we are forever grateful and thankful that our father and later, our mother gave us this “gift.”
What can you do to prepare your family and why is it important?
John C. Curran is a Visiting Lecturer in RIT’s Department of Accounting and Finance, Saunders College of Business. He is a Certified Public Accountant and a Certified Financial Planner.
“Whether you have many assets or only a few, the process of collecting and accounting for those assets after death is fairly similar. If the executor (the family member or another individual/firm) has a roadmap showing a listing of assets and the important information associated with them, the process of settling the estate will become much easier. One of the burdens after the death of a loved one is to undertake “the hunt” to identify bank accounts, investment accounts, life insurance policies, subscriptions, etc. that were owned by a decedent at the time of death. In addition to being tedious, this hunt can also be an emotional challenge for the family as they revisit the details of the decedent’s life. A listing of these assets along with a contact person (if the asset is held outside the house) and contact information, account number, the name the asset is held under, passwords and locations of important ownership documents can significantly reduce the burden placed on the family and the executor,” says Curran.
“Another practical matter is that there may be expenditures needed to maintain the asset (eg. HOA fees on a vacation home, insurance premium on collectibles’ insurance, or property taxes). By identifying the asset for the family, the decedent makes the maintenance and ultimate transition of the asset easier,” he adds.
In a 2019 survey shared byCaring.com, 57 percent of U.S. adults do not have estate planning documents like a will. Dying without a will can create unnecessary problems for your surviving family members.
“If one dies without a will, or “intestate”, there are a number of negative consequences that might arise”, says Curran. First, the assets of the decedent might not be distributed to the people to whom you want them to go. Assets pass to heirs through beneficiary designations (as with pension plans and life insurance), asset titling (joint or tenants in common) and finally through one’s probate estate (assets pass via your will). Without a will, your prized collections and other assets will be dispersed by the courts in a manner deemed appropriate by them, rather than in accordance with the decedent’s express desires. Second, if you have minor children the guardianship of those children will be determined solely by the courts, as opposed to following the direction you could have established in a will. Third, any charitable gifts or small gifts to non-family members are likely to go unfulfilled as the court will follow a blood relationship line when providing for an estate distribution.”
Curran adds, “Without a will a petition is made to the Surrogate’s Court regarding to the disposition of the estate’s assets. There may be a number of people who believe they are entitled to these assets which may result in family squabbles. The process to reach an appropriate determination may be financially costly, time consuming and ruin a family’s harmony.”
The bottom line?
“In sum, dying without a will leaves a family in the challenging position of trying to determine an appropriate way to split up the decedent’s assets, as directed by the court, but without the benefit of the decedent’s input,” says Curran.
What if you are a young adult? When should you start planning?
“While young adults may not have significant assets they are concerned about being passed on to heirs, the issue of minor guardianship may apply to them,” says Curran.
Here’s something else. Do you do your banking or pay bills online? If you are on social media you have a digital footprint.
“One of the more recent pressing issues in the estate field surrounds access to social media. Without password access and permission from the former (now deceased) owner, all the photos, chats and other material stored on social media sites might be lost forever. Many of the accounts are locked upon the death of the owner and absent directed permission, no one else may access the account. So, if you have a collection of photos stored in the cloud that you want to have passed on to heirs, be sure to make a provision in your will to designate a recipient of that account’s access,” says Curran.
During the holidays many families come together under one roof. What better time to carve out some quiet time to share your information.
Yes, it may be the gift no one wants to talk about—but financial experts say it is a talk worth having.
A few more things to think about:
Roles reversed: If you are an adult child, you may need to be the one to prompt the discussion with your parents. You could start by sharing your own estate plans.
Don’t forget Fido. Include plans for the care of your pet.
Dividing personal items among family members? Ask what they might want. Put it in your will or in writing. If there is an issue, draw lots or have a neutral third party assist.