Have you had “the talk” yet? Ya’ know, the really awkward conversation we all dread? I’ve thought about having it during our Thanksgiving dinner, but I just don’t know how to begin. They’re so young…maybe I can wait a little while longer. I mean, really, how many their age are actually doing it?
Of course, I’m sure you know “the talk” I’m referring to: a discussion with your parents and grandparents about their financial and healthcare wishes should they become too sick to make them on their own. It’s an awkward conversation to bring up (hey, pass the potatoes…by the way, what would you do if you can’t manage your own money anymore?), and even more awkward to continue (Uh huh. Can you give my brother all the bills but me all the cash? Great turkey, mom!)–but what’s the cost if you DON’T bring it up?
I’m writing this tonight while driving (read: riding shotgun) from Chicago with a world-class estate planning attorney who’s so busy he can’t keep his head on straight. With so many changes looming around the fiscal cliff and government tax plan, people are battening down the hatches. I thought I’d take this time to interview this young man as we barrel down the freeway.
So, Mr. Estate Planning Attorney, what are the most important things you need to discuss with your parents about money?
Can they give you some? Ha ha ha. Well, first of all, with the estate tax going up, seriously, should they be giving you some money through a gifting strategy? Also, have they grandfathered their estate exemption?
What the heck is “grandfather their estate exemption” mean?
It basically means: Have they taken advantage of the existing laws to benefit them, compared to their new laws expected in 2013?
What about “the talk?” What kind of healthcare questions should we, as their children, know?
First, they need to know every state has a healthcare power of attorney and the forms can be found at the local public library. That POA lets them dictate who can make medical decisions if they’re not able. Secondly, they should probably let you know, or you should ask, what their long-term health wishes are. I mean…the weird questions like “Do you want life support” and stuff like that. But all of that can be handled in their healthcare POA.
So, what happens if someone doesn’t have a healthcare POA? And, while we’re on it, when should someone get one of these things?
Everyone of legal age should have one. If you don’t have one, doctors cannot follow your specific wishes regarding your healthcare. Also, if you’re unconscious, doctors cannot make healthcare decisions for you, unless it’s an emergency. For example, we had a client who went in for surgery, routine-type stuff, when the doctors found a small tear in his kidney. Without a POA, the doctors would have had to wake him up to get his permission. Now, thankfully his wife was waiting in the waiting room, and was his POA, so they were able to fix it no problem.
So we all need these things no matter what. Got it. Anything else we should know before year end?
The fiscal cliff is going to affect estate and income taxes. If you have more than $2 million, you need to talk to your attorney immediately. Remember, that $2 million includes the death benefits from your life insurances through work and outside policies–it’s not just your assets.
Sounds like your calendar is filling up fast! Thanks for your insight. Maybe we can get you on our podcast?
Would love it.
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