#29 - Dealing with Clutter and Debt
Reluctant Executor News
As our parents age, it brings us new and unexpected challenges. What do we do with all of the things in their house? Do we take on any debt they have?
These questions also make us think about how to keep our kids from having to go through these same challenges when we get to be in that role.
What are you doing differently to help your kids that you learned from taking care of your parents?
LinkedIn post from August 23, 2024
The single most important thing you can do to help your family?
Declutter.
Get rid of things that you don't need.
This topic comes up over and over again from families supporting ageing parents. They express how overwhelming it is to clean out a loved one's house.
This brings out a different type of stress when compared to other estate administrative tasks.
Transferring bank accounts or closing subscriptions is tedious and time consuming, but there is a process to follow and an eventual resolution.
When cleaning out a house, you're left with open ended questions that may never be resolved. Plus there is emotional attachment.
● Was this important?
● Is there a story behind this?
● Oh, I remember this from…
Separate things that have value, either monetary or sentimental, from everything else. It may be the most impactful thing you can do to help your family.
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LinkedIn post from August 1, 2024
Will you be on the hook for your parent's debt?
The average debt for retirees in the US is over $100k. If your parents pass away before paying this debt, who is responsible for paying it?
The short answer is that the estate is responsible for the debt, not you.
This means that only assets that pass into the estate can be claimed by creditors for debt repayment.
Estate assets can be anything that is not in a trust or does not have an attached beneficiary.
What about assets that pass directly to a beneficiary, like life insurance or IRAs?
Since these do not pass into the estate, creditors cannot go after these accounts.
But there are exceptions and caveats, so make sure you check with an estate attorney if you're in this situation.
More importantly, make sure you have visibility into any debts that your parents have.
If you need help figuring out how to start this conversation, I can help.
Click here to comment or like this post on LinkedIn.
Estate Map
One way to help your kids as you age is to make sure they know what to expect. Documenting and sharing information they'll need to close your estate is one of the best gifts you can give your children.
Reluctant Executor's Estate Map template is a free resource that can help you document this critical information. You can download an Estate Map template to get started, or contact me at Bill@ReluctantExecutor.com for one-on-one guidance.