Questions to Ask Your Parent About Their Estate Plan
Your last will and testament and asset transfer plan are a gift to your loved ones. You’re giving them the opportunity to grieve and celebrate your life without any extra stress or confusion about legal documents or procedures.
But has your parent done the same for you? If they weren’t sure where to start or were distracted by other priorities, they might have delayed their estate planning for years — which could leave you in a tricky situation in the future.
If you don’t know whether your parent(s) have their assets in order, here are the important categories to talk to them about.
Last Will and Testament
The last will and testament provides instructions for the transfer of assets after death. It allows an individual to pass on gifts of money or property to family or a person or organization who would otherwise not inherit under Iowa law. If your parent doesn’t have a Will, Iowa law determines who will receive their assets.
It is lovely to support your parent through the execution of a Will, but note that each person has to meet the legal competency requirements to give instructions for the designations in a Will. Also, a Will is a private document, so don’t be offended if you are not able to see it if it exists or be in the room when a new Will is signed.
However, an adult child can support their parent by referring them to an attorney to assist with the process and even helping them make the appointment. The parent must attend the appointment, but it is up to the attorney to decide whether to allow the adult child in the room.
To encourage your parents to get a Will, explain that the Will is for their survivors and not for themselves. It is a love letter to their loved ones. Without a Will, disagreements over the sale and distribution of personal property may occur. It is often scary to think about the end of life, but knowing there is a Will in place provides peace of mind.
Questions to ask your parent:
Do you have a Will?
Is the executor still healthy and able to act?
Does your executor know the location of the Will?
Can your executor access the Will?
Does your executor have the information to access your digital assets?
Does the Will need to be updated?
Does the Will need to be reviewed by an attorney to make sure it is valid? (This is important for DIY Wills and handwritten Wills).
Have questions? Use the secure form to send your questions to Hope Wood.
2. Powers of Attorney Documents That May Be Needed During Your Parent’s Lifetime
Health Care Power of Attorney
Sometimes known as a medical power of attorney, typically this document appoints a person to act on your behalf when your attending doctor determines you are unable to make your own health care decisions. When the attending doctor determines that you are competent, health care decisions revert back to you. You are able to name an alternate agent in this document and provide written health care instructions for your agent to follow.
Financial Power of Attorney
Also known as a statutory power of attorney, this document appoints a person to manage your property and assets. The document specifies when it becomes effective and what property is covered by the document. A financial power of attorney may be effective at the moment of signing or on the occurrence of a specific condition. If the authority is effective on the condition of incapacity, the document should include that the determination of incapacity is made in writing by your attending physician.
Living Will
A living will is a statement, formally called a “declaration,” that life-sustaining procedures be withheld or withdrawn in the event you face a terminal condition or severe illness. Through a living will, you can direct your attending physician to not use — or stop using — life-sustaining measures if you are unable to participate in the decision. A living will is often signed at the same time as a health care power of attorney. If there are life-sustaining measures in place, your appointed health care power of attorney will work with your attending physician.
Questions to ask your parent about these documents:
Do you have a power of attorney for health care?
Do you have a power of attorney for finances?
Do you have have a living will?
Where are the original documents stored?
Is the person(s) appointed as your power of attorney still healthy and able to act?
Are the documents signed and notarized?
Have questions? Use the secure form to send your questions to Hope Wood.
3. Asset Management During Your Parent’s Lifetime
Assets that are in joint ownership transfer to the surviving joint owner; this is an asset that transfers by law. If the asset has a single owner and a named beneficiary, then it transfers to the beneficiary; this is an asset that transfers by contract.
Assets that do not transfer by law or by contract have to go through court-supervised probate to transfer to the rightful beneficiary under Iowa law.
Questions to ask your parent about asset transfer
Review each type of asset in the list below to determine whether the asset will transfer according to your parent’s wishes.
If your parent is unsure about the status of the asset or needs to make updates, they should contact the financial institution who holds the asset. For real estate questions, contact an attorney.
Note: The information below is general information and is not legal advice. Contact Hope for a specific estate plan for your situation.
Real estate
If your parent is married, review the deed to assure your parent and their spouse are listed as joint tenants with full rights of survivorship.
If your parent is single, they should consider a revocable trust and deed the real estate to the trustee named in the trust. If the real estate is not owned by the trust, the asset will transfer through their Will using the court-supervised probate process.
Bank and credit union accounts, certificates of deposit, and money market accounts
Joint accounts: The account will transfer by law to the surviving joint account holder. If both account holders are deceased, a payable-on-death (POD) is needed to provide a direct transfer to a beneficiary and bypass probate.
Single accounts: The account will transfer to your parent’s estate through probate. Encourage your parent to complete a POD designation to provide a direct transfer to a beneficiary and bypass probate.
Tip: If your parent wants a POD designation for multiple people, they will need to list each person and the percent of the account each should receive.
Life insurance and retirement and investment accounts
Encourage your parent to review their named beneficiaries.
Your parent should consider naming at least one alternate beneficiary, in order to avoid probate if the first beneficiary is deceased.
If your parent named a first and alternate beneficiary before they had children, they may need to update their account if they want the benefits to pass to the children.
Stock certificates
Your parent may need to add a transfer-on-death (TOD) designation to the account to provide a direct transfer and bypass probate.
If your parent has a stock certificate without a TOD or joint owner, the asset may need to go through probate to transfer to a beneficiary.
Bonds
Your parent should cash in any bonds that have matured. Most banks can accommodate this process.
Bonds can be managed and redeemed through treasurydirect.gov.
Have questions? Use the secure form to send your questions to Hope Wood.
Getting assets in order may not be easy, but it brings peace of mind to you and your parent — something that money cannot buy. If you have more specific questions about your parent’s estate planning that are not addressed above, feel free to schedule a virtual consultation.
