FROM THE ATTORNEYS PEN
by Judith Lee Sterling
Dear Friends,
April 15 and income tax season have come and gone, and
we all can relax just a little. The CPAs at Sterling
& Tucker were very busy making sure that our tax
clients filed accurate income tax returns, paid a legal
minimum of taxes, and filed returns prepared in such
way as to minimize the chance of a tax audit.
Whether you have filed your tax returns or have filed
for extensions, your financial paperwork is more or
less in one place and your finances are fresh in your
mind. Now is the best time to review your financial
portfolio and do planning to meet future financial goals.
For those of you whose parents may soon need assistance,
or are already receiving assistance, this is a good
time to review the estate planning, finances and financial
planning of your parents.
The topic of your parents finances can be touchy. You
do not want to appear greedy and overly interested in
an inheritance. For your parents, fears of dependency,
incapacity and death can hinder the discussions. If
family relationships have not been smooth, a discussion
about finances could bring up past conflicts and hard
feelings.
It can be hard to accept the fact that your parents
will not be around forever, and that you will eventually
need to step up to the plate. It is difficult to face
their mortality and your own. However, transitions will
be less chaotic and easier to face if you have knowledge
of your parents planning in advance. If you parents
do not resist your helpful suggestions, there comes
a time when it is appropriate for you to take a leadership
role.
If your parents cultural traditions make talking about
money a sensitive (or even taboo) topic, you may want
to enlist the help of someone that your parents trust,
such as a friend or advisor. This person might encourage
your parents to talk with you or have a family meeting.
You want to strike a balance between safety and independence.
The goal is to make plans before there is a family emergency,
at a time when tensions are low, just as one would have
an emergency plan for a hurricane.
Ideally, your parents would have somewhere documented
the full scope of their medical and financial situation,
including the names and addresses of their financial
and legal advisors. Find out where they keep financial
documents such as social security numbers, investment
accounts, insurance policies, safe-deposit box keys,
tax returns, wills and trusts and related documents.
If they resist, encourage them to at least make a list
of these items and let you know where the list can be
found in the case of an emergency. In Location Lists
in the Estate Planning Portfolio that we have provided
to you as part of your estate plan can serve as a blueprint
for the information that your parents should have.
Determine whether your parents current financial situation
will provide sufficient income for their future needs.
Even a well-funded retirement plan can run out of money
too soon if it is poorly constructed. If changes are
needed, the sooner you raise the issue, the better.
Discuss what might happen if your parents can no longer
live independently. Your parents might not have a plan
in their mind, but might have a lingering concern. Talking
about it can bring peace of mind.
Life is a journey and the latter part of the journey
can be much smoother and less perilous for parents if
their children are traveling with them.
Good luck!
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