As adult children delay marriage and elderly parents are living longer, estate planning can sometimes get lost in the shuffle. A recent survey showed that only about 55% of all parents have an estate plan or even a simple will. In addition, almost 25% of people ages 65 years and older admitted that they do not know where their parents’ estate planning documents are kept, and 44% do not know what the contents of those documents say.
Importance of an Estate Plan
Horror stories abound of adult children unable to provide for their ailing parents because they do not have the proper documentation. Despite needing to make immediate decisions, children get stuck in court and money gets tied up because there is no estate plan. Even fewer parents have health care directives and it can have an immediate effect on their wellbeing if there is a medical emergency.
Tips for Organizing an Estate Plan
Estate planning attorneys and other experts recommend that adult children and their elderly parents sit down and create a solid estate plan. This can potentially include a will, trust, power of attorney, healthcare proxy forms, and more. Here are some simple tips to create, organize, and keep track of an estate plan.
Check Every Five
Simply because an estate plan is completed, it does not mean that the estate planning process is over. You should check and update any relevant information in an estate plan every five years, at most. However, the plan should be updated anytime there is a significant life event for you or your parents.
This includes all relevant documents within the estate plan in addition to any accounts where a beneficiary is designated, such as retirement accounts, bank accounts, life insurance, and the like. Updating beneficiary documents is incredibly important because the person named is automatically the taker, regardless of your elderly parent’s final wishes. Updating an estate plan also helps you keep track of where all of the important documents are located.
Finish the Job
Once the estate plan is created, it is also important that you share the information with the proper parties. For example, you should give a copy of the healthcare proxy to any relevant medical professionals, and a copy of any financial documents to the bank. If any updates are made to the estate, you should also remember to update these people, as well.
One of the simplest, yet most overlooked, issues in an estate plan is to stay organized. It can be as simple as keeping all of the relevant documents in a binder, or keep all of the documents in a bank safety deposit box. In addition to the basic estate planning documents, consider leaving additional pages with all of your digital assets, user names, passwords, and the like with these other important papers. If you choose to keep your documents in an electronic format, keep a copy on a separate hard drive or with an online company that specializes in keeping sensitive estate planning documents.