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Broaching the Subject

It's not easy to talk to your parents about what happens to their money when they die, but it'll probably be smoother in the long run if you do

By Liza N. Burby

When her father died from a stroke last fall, Carolyn Gallogly could take comfort knowing that her 81-year-old mother would be financially secure and remain in the lakefront home in Indiana that had become a vacation spot for the entire family.

But it didn't happen by accident.

"We sat down together as a family -- my parents, me and my four siblings -- to talk about estate planning," says Gallogly, 55, of Bayport. They also hired an elder-law attorney to work with the family, adds Gallogly, who teaches gerontology at St. Joseph's College in Patchogue.

"Even though I was a trained gerontologist, I was still one more child in the family," she says. Now "my mother's estate is secure and my brothers and sister and I know exactly what our parents want to have happen to it."

Difficulty talking

But Gallogly's situation is all too rare, many experts say. More common is a complete lack of discussion between parents and children, says Ellen Eichelbaum, a gerontologist in Northport who works frequently as a consultant for large corporations.

"It can tear families apart," Eichelbaum says. "You have to talk to your siblings and your parents so when it does come up, you're already comfortable discussing it openly."

Eichelbaum and others say the problems usually result from deep fears over broaching the topic of the parents' estate -- it's right up there with conversations about sex. The silence, experts agree, is a recipe for emotional and financial disasters and pitched battles among siblings -- especially when some believe they deserve a greater share of the estate because they've been more involved in caring for their aging parents.

And yet, many of these problems also can be avoided, elder-care and estate experts say, through planned, open conversations among family members -- before they end up responding to a crisis. While estate planning is about saving money, it's also about saving .families, says Les Kotzer, an estate attorney based in Toronto and co- .author of "The Family Fight: Planning to Avoid It."

"The most important asset we have is not in the bank; it's in the family photo album," Kotzer says. "Bad communication and bad assumptions about money can lead to the destruction of a family."

But the toughest part is often starting the conversation. Adult children may avoid the subject out of a fear of losing their parents, or a fear that their parents may perceive them as greedy. But more likely, says Eichelbaum, the conflict arises from the parent's views, in part because many in the post-World War II generation consider their finances a private matter.

"Some parents say, 'My kids want my money and I don't want to give it to them,'" says Eichelbaum. "A lot of them fear if they divulge what they have, their kids will start to talk about who wants what, and they don't want their kids fighting about it."

Another common sentiment is: "Why should I care? I'll be dead anyway," says Dennis Kucica, an attorney with Moritt, Hock, Hamroff and Horowitz LLD in Garden City. "This comes from a fear of our own mortality, from being afraid to deal with the fact that we'll die."

But leaving your affairs in disarray "can be disheartening to the children dealing with the mess," Kucica says. "And you've worked hard all your life. Why have your assets taken away in taxes?"

Expressed wishes

It's helpful to first have a conversation about everyone's expectations, says Ruth Gold, director of communications for the Nassau County Department of Senior Citizen Affairs in Mineola.

"Planning ahead of time gives parents a chance to at least put in writing their feelings about particular items or plans," she says. "Or parents can explain their wishes to their children in person and ask them to indicate what they would like. Parents shouldn't assume they know what their kids want."

Kotzer notes that many parents take for granted they'll just .divide everything equally.

"But 'equal' doesn't always mean fair, and the siblings may each have their own assumptions," he says. "What if you have a caregiving child who lives with you, maybe can't work because she's caring for you, and your other two children live in an.other state and call twice a year? How does that caregiving child feel if she inherits equally? Or you have a son whose college education you paid for and the others paid their own way: They may feel that they have more coming to them to balance that out."

Even if adult children want to share, says Kucica, it's not always a question of the right thing to do, but what state and federal governments will allow.

"An inheriting child may have to pay gift tax on transfers of funds to siblings and may also use up their own tax credits that could have benefited their children," he says. "So sometimes in being fair to a sibling, the adult child is taking away from their own child."

Siblings and second spouses

In addition, Kucica says, pressure may come from other family members. "Siblings may be more likely to give in to each other because of their family history and because they know what mom and dad would want," he says. "But the out.sider can stir up a lot of trouble. If you have an in-law whispering in their partner's ear about what they're entitled to and should fight for, suddenly things can blow up."

And what if a parent is in a second marriage?

People should never assume their second spouse will protect the interests of the children from their first marriage, experts warn.

"If you make one mistake in your will, or don't have one, your kids will lose it all," Kotzer says. "Someone con.tacted me because he had lost family property that dated back to the Civil War to his step-.siblings. They wouldn't even let him return to his childhood home to gather family photographs because they now owned it all. And this was simply because the father didn't specifically name him in the will and assumed his wife would be fair."

A more immediate reason for families to discuss parents' finances is to protect them and their assets, should long-term care for one or both parents be necessary.

"It's tough enough for a child to deal emotionally with a parent's decline, without having to also run around trying to locate their assets, like bank accounts," says Kotzer. "This makes them vulnerable and usually then requires a third party to help with a parent's things, which can be costly."

Ann-Margaret Carrozza, a state assembly.woman for northeast Queens and a practicing elder- law attorney in Bayside, says communication between a surviving parent and children is vitally important. "Children need at least to know where a parent's documents are or what attorney to go to," she says. "Parents need to create some sort of road map for them to follow."

At the same time, parents may need help figuring out their financial situation.

Jeff Marsee, 49, a provost for Katharine Gibbs School in Melville, says that a few years ago he arranged a meeting at his parents' home in California with his mother and two .brothers to discuss his father's decline from Alzheimer's.

"My father had done a good job of maintaining the finances in anticipation of his decline. But my mother wasn't able to translate that into what she could afford to do, so my .brothers and I had to talk about it with her," says Marsee, who lives in Manhattan. "My parents had always been very private about their money, so this conversation was hard for her. In some cases though, adult children have to have a tough- love stance to this issue to give them a reality check."

Moreover, adds Carrozza, that conversation should include the children's financial situation. "Children should give their parents information, too, including financial problems like a bankruptcy so that parents don't leave something to them that becomes subject to a creditor's claims," she says. "In this way, parents can protect their assets for their children."

In general, Carrozza rec.ommends that families approach the estate planning .process in stages. "As long as a parent has a health-care proxy, durable power of attorney, and an adequate will, these documents can always be modified as needed," she says. "But .having it in place ensures that everyone knows what the plan is and eases communication .issues."

Third-party help

If communication with either a parent or child proves difficult, Arlene Haims, chief operating officer of Haims Insurance Group in Uniondale, recommends bringing in a third party, such as an elder- law attorney, financial planner, psychologist or social worker.

"I've personally found that parents find it easier to accept the advice of these professionals than their own child," she says.

In addition to their expertise, their presence can reduce stresses about emotional discussions.

"I found that once my parents were willing to do some planning, using an outside neutral person to help the family sort through the issues helped a lot," says Gallogly, the Bayport gerontologist. "The neutral outsider kept all the communication channels open for us. With all of us around the table, my father could ask each of us how we felt about the property. I'm not sure we could have had that discussion without the outside person. And it truly did give my father peace of mind before he died."