This is a very good question. The short answer is, “It just depends.”
Important variables include each parent’s age, physical health, mental capacity, and relationship with the adult child or children who would be raising the issue.
If not done for the right reasons and in the right way, the parents could feel as though the person or people asking the question are a little too anxious to receive an inheritance. I have heard of situations where well intentioned adult children ended up regretting that they had even mentioned the subject.
But I am familiar with many other situations where parents have appreciated the nudge and were genuinely pleased to have a child or children interested, or even involved, in the process. A common element in these families has been children who make clear their appreciation for what they have already received; a lack of expectations or entitlement; and a sincere belief that the perfect estate plan is whatever plan the parents want once they fully understand and have fully considered their options.
According to a recent U.S. Trust Survey, many baby boomers think they have benefited their children sufficiently and feel no obligation to leave an inheritance. Some of them worry that the prospect of a large inheritance could adversely affect the character development of their children and perhaps even their grandchildren.
Ironically, that can be an especially good reason to engage in estate planning. So-called incentive trusts are an increasingly popular way to provide for descendants without lessening their incentive to develop self-discipline, self-motivation, and self-worth.
Also increasingly popular are trusts that reflect a list of family values, such as mutual support and community involvement.
The three most basic reasons why parents might want to engage in estate planning include:
(1) Controlling the legal process required to carry out their wishes after their lifetime;
(2) Avoiding future conflict within the family; and
(3) Planning for the possibility of mental incapacity.
Adult children who think their parents could benefit from creating or updating an estate plan should consider the following before approaching them:
(1) You will be discussing their money and other property;
(2) The estate plan in question is theirs, not yours;
(3) What matters are the parents’ priorities/values/goals; and
(4) If you think they might not be comfortable discussing their estate plans with you, consider suggesting that they meet privately with an estate planning attorney or perhaps a trust officer or financial planner who could point them in the right direction.
Finally, I am required to make clear that this is not legal advice and that you should not rely on any of this information to determine what is in your own best interest. Further installments of this column will address the other common questions and situations that I see or hear about as an estate planning attorney. The circumstances of real clients are never discussed in this column.