How Do I Help My Mom Start Estate Planning?

Dear Kristin,

I am helping my elderly mother with estate planning (trust), insurance for her home, and other everyday tasks. She is of able body and a sound mind. I have never owned a home and don't know how I can help her. She doesn't have a huge income or savings—only enough to take care of her bills. Basically, she is not trusting of everyone with the little she has. She only trusts me, and I don’t know how to help her. Can you tell me what steps to take to help a family member prepare for their death?

Sincerely,

Brianna

Dear Brianna,

It’s never easy to think about the death of a loved one, but it’s a reality of life. And the better prepared we are, the better things will be, so it’s great that you want to have these conversations with your mom now before she becomes unable to participate, or worse yet, dies without a plan in place at all.

You haven’t indicated that you worry your mother will pass away soon, so I think it would be best if you prepared to be her financial caregiver while she is still alive, but also help do some estate planning to prepare for her death.

Given her limited funds and assets, creating a trust (a legal entity that holds an individual’s property and assets) doesn’t seem necessary. But you do want to make sure that she will be financially taken care of, even when she no longer is physically or mentally capable of tending to her own affairs. Ask your mother about her assets, funds, debts, and bills so you can have a full picture of her finances. This will help you understand the best way to care for your mother’s financial needs going forward. You may even want to simplify or automate her bills so that no payments are missed. 

Since your mother trusts you, it would be a good idea if you became her power of attorney. This is a legal document that grants you the ability to handle your mother’s financial affairs and make financial decisions on her behalf. As your mother’s power of attorney, you’ll have access to her accounts so you can stay on top of all her financial obligations. You’ll also want to discuss creating an advance medical directive (one example of this is a living will) so that her medical wishes are respected in the event that she becomes incapacitated or can’t let you know what medical care she would (or would not) like.

Now that you know her finances will be taken care of throughout the rest of her life, it’s time to have a conversation about her wishes for her assets after she dies. Does she have life insurance? A burial plan? Will you or other beneficiaries inherit any of her assets after she dies? You’ll want to know the answer to these questions to create an estate plan, which includes her will.

A will determines all the assets that are left to beneficiaries after someone dies. ​​Your mother can also name you as the executor of her will, which would put you in charge of settling her financial affairs after her death, and overseeing her assets during the probate process. Probate is a court-supervised process that determines whether your mother’s will is valid before the assets are distributed. The process does cost money, but you might be able to avoid probate costs since there is a simplified process for individuals who don’t have many assets. 

The key here is to start the conversation. Once you fully understand your mom’s financial picture and talk through her wishes, you’ll both be able to effectively create a plan to navigate the tricky and sometimes complicated process of preparing for death. And don’t be afraid to consult an attorney who can answer your questions and file any and all necessary paperwork.

Good luck!

-Kristin

If you have questions about money, Kristin is here to help. Submit an anonymous question and she may answer it in a future column.