The State of Your Parents' Estate

Talking with a parent about estate planning is never easy. Here are several conversation starters that can help adult children and their parents plan.

As of 2018, the number of Americans above 65 years old was 52 million1 and is expected to climb significantly as Baby Boomers retire over the next two decades. Even with this "graying of America," a recent survey showed that only 40% of adult Americans have any kind of estate planning documents at all,2 putting at risk the smooth transfer of hard-earned wealth from one generation to another.

Often the issue is simply a difficulty starting a conversation about estate planning. Talking with a parent about sensitive topics like incapacity or end-of-life issues is never easy. But adults with aging parents can open the lines of communication about the family's financial future and the need to have a plan. Here are four questions to ask:

1. Have you spoken with a lawyer about an estate plan?

Your parents may not want to face the possibility of getting sick, having to give up control over their lives, or even a life-ending illness. Parents can also find it awkward to discuss their money. A recent survey showed 25% of respondents said they hadn't discussed estate planning because they don't like thinking about their own death.3 In a different survey, 40% of respondents said 'I just haven't gotten around to it' which may indicate procrastination on a difficult matter.4 In a similar manner, adult children, not wanting to appear greedy and focused on themselves, procrastinate as well.

The fact is it's emotional for everyone. But it is important for both parent and child to understand the need to plan for a smooth transfer of wealth within the family. An estate plan takes into consideration current tax laws and can help your parents maintain control of their money until they no longer can.

2. Have you drawn up any paperwork so you're prepared in case of illness or incapacity?

Your parents' ability to handle future financial and medical matters may deteriorate. It is crucial that they identify people they trust now, while they are still able, to make decisions for them in the event of incapacity. Now is the time to make sure they've done so and to be involved in the decision-making to the degree everyone is comfortable.

You should also ask your parents how they feel about being cared for should they need it? Some parents equate having their children care for them as being a burden on their kids. Think about whether you agree with their notion of the future and what you are willing to take on. You can help them visualize the future and what they want so you can help.

3. What are your priorities for the future use of your money? What causes are important to you?

It's important to explain that estate planning covers a wide variety of issues including philanthropy. Find out if they have explored gifting strategies to efficiently pass on family wealth. Another question might be about contributing to family educational needs, for their grandchildren.

Examine what they care deeply about and how your values are aligned. What are their charitable goals? Depending on your family's wealth levels, you can define family investment and financial goals and objectives and even a philanthropic policy to direct wealth toward making positive social or environmental change.

4. Which other family members should be involved in the planning process?

When thinking about estate planning and the drafting of wills, trusts and the division of assets, a family tree chart can help you build a solid estate plan'particularly in large families. Creating a family tree with your parents and siblings will not only allow you to visualize your family hierarchy, but better understand your parents' relationships and gain knowledge about all of your relatives. A set plan may help avert conflicts between siblings in the future, as opinions will likely differ on what is best for mom or dad or how their assets should be divided.

Helping prepare parents for important financial matters can be a complex and sometimes emotional process. Your Morgan Stanley Financial Advisor can help further explain all of the steps you should be taking.

1 Source:

2 Source: 2019 Wills Survey,

3 Source: WealthCounsel, 2016 Estate Planning Awareness Survey.

4 Source: 2019 Wills Survey,

This material has been prepared for informational purposes only. It does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Smith Barney LLC ('Morgan Stanley') recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Morgan Stanley Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.

Morgan Stanley, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

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