Читать книгу Estate Planning Through Family Meetings - Lynne Butler - Страница 7

The problem with talking to your parents about money is that it is hard not to appear greedy, either to them or to other family members who find out you have raised the subject. Most people are more private about their finances than they are about any other aspect of their lives. You might ask your parent, “Have you got your money invested safely and properly?” and what they hear might be, “How much money do you have, and are you leaving it to me when you pass away?” Money is a touchy subject.

Part of talking about money is talking about insurance. The types of insurance that are particularly relevant to aging parents and family estate planning are life insurance, long-term care insurance, and critical illness insurance (each of which is defined below). Not everyone has or needs all of these types of policies, as everybody’s situation is different. However, if you are helping your parents with planning, it is essential that you find out and understand what your parents have in place.

Insurance can be remarkably useful in filling money gaps in estates. Your parents might find it useful to meet with an insurance representative to talk about how different kinds of insurance might be helpful in their situation. You should be aware though, that it is possible to be over-insured, so your parents should thoroughly understand what a policy is going to do for them before they buy a new one.

Life insurance pays out an agreed-upon amount of money to a named beneficiary when the insured person dies. Often, the named beneficiary is a spouse or other family member, but life insurance can be useful when the named beneficiary is the estate of the deceased person, because this creates cash flow that did not exist before the death. Life insurance is also used frequently in conjunction with privately owned businesses to buy back the shares of a business owner who passes away.

Long-term care insurance covers the costs of living in a long-term care facility, or, in some cases, the costs of receiving specialized care at home. It is intended to be used by individuals who are no longer able to deal with personal care such as bathing, toileting, or meal preparation due to the complications of aging. It is paid in the form of weekly or monthly benefits and can be used to supplement government or private sources of retirement funding.

Critical illness insurance pays out a lump sum of money to a policy owner who suffers a major illness such as cancer or a heart attack and survives.

The fact that these types of insurance are listed here does not mean that everyone reading this book should urge their parents to buy all of these policies. They are listed so that when you have a discussion with your parents or a family meeting, you will be sure to ask what is in place. You might also see how one of these types of insurance might fill a need for the future and want to raise it at your meeting. Sometimes putting insurance to good use requires the cooperation of the whole family, such as when a group of siblings pays the premiums on a long-term care insurance policy for their parents.

The most common of all of these is life insurance. When talking about a life insurance policy, you must understand the following information about the policy:

• Who is the owner of the policy?

• Whose life is insured by the policy? (Note that some policies insure more than one life, such as Joint and Last to Die policies.)

• Who is the beneficiary of the policy (i.e., who will get the money on the death of the life-insured person)?

• Is the policy whole life, term, group, etc.?

• What is the face value of the policy (i.e., how much money will be paid out on the death of the insured person)?