Estate planning is usually viewed through the lens of what happens to wealth after someone passes away. What’s often overlooked is that estate planning also helps protect a person’s wealth and wishes during their lifetime.
For families with aging parents, the goal shouldn’t simply be to plan for what happens when they’re gone. It should also be to ensure their parents’ best interests are protected throughout their lifetime, that their wishes guide decisions while they’re still making them, and that the whole family works from the same understanding.
Estate plans are often more effective when created early, well before they’re needed.
Planning Early with a Parent Creates Clarity and Confidence
Financial and legal professionals typically encourage early planning because it allows families to engage a parent while they’re fully capable of understanding everything, asking thoughtful questions, and making deliberate decisions. This helps create a durable, long-term plan that they directed, reducing questions about their exact wishes.
Waiting until a parent begins to show signs of decline can create uncertainty in whatever plan comes after. It also increases the risk of family members interpreting a parent’s wishes and best interests differently, setting the stage for conflicting opinions about how to move forward.
Steps Families Can Take Now
The earlier planning begins, the more ownership a parent has over the plan. Here are some ways to begin the process.
1. Start the Conversation Early and Normalize It
The best time to talk about a parent’s wishes is before there’s an urgent need. To make it easier to engage openly and honestly, make it clear that the conversation is about proactive planning rather than a specific concern. Frame it as an ongoing discussion about planning the family’s future together.
2. Put the Right Documents in Place
A few foundational documents allow parents to define how they want things handled:
- A revocable living trust sets clear terms for how assets should be managed and names a successor trustee to step in if needed, all according to the parent’s instructions.
- A durable power of attorney lets a parent choose who can act on their behalf financially.
- A healthcare directive names who the parent would like to act on their behalf for medical decisions.
Because estate planning documents and requirements vary by state, families should work with qualified legal counsel to determine which documents are appropriate and how they should be drafted.
Each works best when completed when a parent can actively and intentionally define the terms, rather than simply signing off on someone else’s decisions.
3. Review Beneficiaries and Account Titling
Beneficiary designations and account titling often carry as much weight as a will or trust. A periodic review ensures these details still reflect a parent’s current intentions.
4. Decide Together Who’s Involved and How
Families that stay on the same page are explicit about roles: who serves as trustee, who holds power of attorney, and how decisions get communicated to everyone else. This is about clarity, not excluding anyone. When everyone has the same information, there’s less room for confusion.
5. Revisit the Plan as Life Changes
An estate plan is a living framework that should be adjusted as circumstances change, whether it’s the parent’s health, family dynamics, or tax laws. Regular reviews help ensure the plan remains current and still reflects the parent’s wishes.
The Value of Working with a Specialist
Estate planning involves important and often difficult decisions that can overlap with legal and tax issues in complex ways. It’s also incredibly personal. An experienced advisor can lead planning with objective guidance based on expertise rather than emotion, and can coordinate with your accountant and attorney to help develop a single, cohesive plan that seeks to address relevant financial, tax, and legal considerations.
Start While It’s Simple
Estate planning is most successful when done early. For families with aging parents, starting now while they’re still healthy and managing their lives can help protect their interests down the line should circumstances change. Strong estate planning goes beyond determining what happens after they pass. It also serves as a living plan that guides clear and confident family decisions while a parent is still alive.
If you’d like help navigating this important conversation and developing a plan, connect with our team. We’re happy to help.
Because estate planning is a topic that raises many concerns for families, we’ve created the following FAQ. If you have further questions, reach out to our team.
Frequently Asked Questions
How do I protect my parents’ money? One effective approach is early planning: establishing documents such as a trust and a power of attorney while a parent is fully able to shape the terms, plus regular family conversations so everyone understands the plan.
Do my parents need a trust? Many families benefit from a trust. A revocable living trust sets clear terms for how assets are managed and names a successor trustee to step in at the appropriate time, as defined by a parent. An advisor can help determine whether it fits your family.
What happens if my parent gets dementia? If a durable power of attorney and healthcare directive are already in place, the transition is smoother: The person a parent already chose simply steps into that role. Without those documents, decisions may require court involvement, which is why it’s best to settle them early.
Should I gift money now or leave it in my will? Both are legitimate strategies, and many plans use a mix. Gifting now lets a parent see the impact and adjust as needed; leaving assets through an estate plan offers more flexibility later. An advisor can help weigh the trade-offs against your family’s goals.
How do I divide an estate fairly? “Fair” and “equal” aren’t always the same thing, and families benefit from discussing that distinction openly. A clear plan, documented while a parent can explain their reasoning, can help prevent confusion later.
How do I avoid family fights over inheritance? Transparency and communication can help. When every family member has the same, clearly communicated information, and decisions are made while a parent is fully involved, there’s less room for misunderstanding.
What is the best way to leave money to grandchildren? Options range from direct gifts to education-focused accounts to trusts with specific terms, depending on the family’s goals and the amount involved. It’s worth discussing with an advisor as part of a broader estate plan.
Who should serve as trustee? This is a decision best made deliberately and early. A trustee should be someone you trust completely. It’s often a family member, but is sometimes a professional fiduciary when neutrality or expertise is the priority.
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