Estate Planning 101 (Continued)

            More often than not our parents’ estates and financial affairs are not in order. Last week we explored how the kids’ involvement in the family’s estate planning can be beneficial.

            Of course, on the illness or death of a parent the lack of a current will or trust and inadequate life and medical insurance comes as a surprise – after it’s too late to do anything about it.

            Resist the temptation to assume “everything is handled,” and explore with your parents or family the basics of what needs to be done to protect the family from financial disaster, severe tax consequences, nursing home costs, ineligibility for Medicaid or Medi-Cal and other governmental assistance, and family disagreements after a parent’s death.

            There’s no magic to avoiding surprises in your parents’ financial future, but here are a few things to consider discussing with Mom and Dad:

• • • An easy transition is to ask your parents whether they have a signed Power of Attorney for Advance Health Care or Health-Care Directive.  Either of these documents ensures that proper health care decisions are made in case they become incapacitated.
    • Is there a will or trust?  Is it current?  Has anyone died since the last will or has there been a divorce or have properties been sold?  Still want the same executor?  Have your parents’ assets appreciated such that a trust might be beneficial?  Remember it doesn’t do any good to lament after the fact how much of the estate went to the government.  At the very least, encourage your parents to meet with an estate-planning lawyer, preferably a certified specialist. Like Kelley Carroll.

• • • If your parents (or you!) don’t have a will, call a lawyer. If you have minimal assets consider making a will yourself by checking out nolo.com or go to an office supply store. Don’t just think about it.
    • Where is your parents’ will or trust? Who has the key to any safe deposit box?
    • What types of life and medical insurance do your parents have? Does it cover long-term care?  Nursing home?  In-home coverage?  What are the limits?  Are the premiums current and are your parents 100% mentally and financially capable of continuing the payments?
    • What assets do your parents have, including cash, residence, investment properties, investments, IRAs, Social Security, banking and savings accounts, retirement plans, and stocks and bonds? Who is on title to the real estate?  Have you taken advantage of the California law that allows marital properties to be held as “community property with right of survivorship,” which can avoid probate and save on income taxes?
    • Is there a complete list of business, financial and family records, with addresses, account executives, home care providers, accountants, estate planning lawyer, deeds, bank account numbers, stocks, promissory notes, insurance policies, Veteran’s benefits, retirement plans, health records, and a home inventory?
    • Are the beneficiaries on life insurance policies and 401(k) plans up to date? You would be surprised how many ex-spouses remain on policies and in wills.
    • Are your parents still driving and has anyone evaluated their driving skills? An unfortunate, under-insured accident is a sure way to lose everything.  What are the auto policy limits?  Consider an umbrella policy for more coverage – generally not that expensive.
    • Do your parents have enough income for their support or will assets have to be sold or can steps be taken today to qualify for Medicaid (or Medi-Cal, as we call it here in California)? I can’t tell you how important that is.  Tax-wise, real estate transfers are perfectly legal but must be done timely and properly to qualify.
    • Have you or your parents considered charitable trusts and other philanthropic plans that allow them to give to their favorite charity (with write-offs) rather than to the government – and still provide for the kids? The proverbial “win-win” – even if your estate is modest.  A gift in our small community goes a long way.

            It’s a lot easier to talk to parents about grandchildren then it is to delve into financial planning, but maybe they will surprise you.  It can be reassuring for the entire family.  At least make sure the basics are covered.

            By the way, have you taken care of YOUR estate planning?

If you don’t have a will,

you deserve

the consequences.

            How would you feel if your assets went to your ex-spouse, to Uncle Sam or completely contrary to your wishes?

            Next week we will discuss the advantages of wills and trusts and charitable giving.

Jim Porter is a retired attorney from Porter Simon, formerly licensed in California and Nevada. Porter Simon has offices in Truckee California and Reno, Nevada. These are Jim’s personal opinions.  He may be reached at jameslporterjr@gmail.com. Like Porter Simon on Facebook. ©2025