Parents spent decades being the ones who took care of everyone else. A question about their money can sound like doubt that they can handle it, or like someone is thinking about an inheritance. So most families wait until a fall, a diagnosis or a confusing bill forces the conversation, and then decisions get made under pressure.
The goal isn't to manage their money. It's to know enough to step in without guessing if they ever need help.
A few words first
- Power of attorney: a document that lets someone handle another person's financial matters if they can't.
- Healthcare proxy: a document naming who makes medical decisions for someone who can't make them.
- Executor: the person named in a will to settle the estate: gather the assets, pay the bills and taxes, and distribute what's left.
- Estate tax: a tax on the total value of what someone leaves behind.
- Inheritance tax: a tax on what a specific person receives, with rates that depend on that person's relationship to whoever died.
- Beneficiary: the person named on an account or policy to receive it. A will doesn't override it. Accounts with a named beneficiary, like a 401(k), an IRA, a life insurance policy or a bank account marked payable on death, pass to that person under the account's own contract, outside the will and outside probate. So an ex-spouse still named on a 401(k) can receive it even if the will leaves everything to someone else. That's why the beneficiary forms get updated after a marriage, a divorce or a death in the family.
Why families put it off
My family has been in the grocery business for generations, and that's where I saw how complicated this gets. Several owners, several entities, and inheritance tax rules turn a family business into something no one can sort out at the kitchen table. That's will and trust territory, and families in that spot usually bring in professionals to plan for both sides of it: what happens to the business, and what happens to the family.
I learned the rest of it as an executor. When an uncle of mine passed away, I became the executor of his estate. It got complicated fast because of minority ownership interests in the family business, New Jersey inheritance tax, and the valuations and appraisals those interests required. It landed around the time I was earning my CPA. More than anything, it restarted the conversation in our family about succession planning for the next generation, which nobody had wanted to reopen before there was a reason.
When there's a business, real estate, or anything held across more than one entity, starting earlier than feels necessary, with a lawyer and an accountant who do this work, saves a lot later.
I think of it this way. Everyone already has a will, the same way every marriage already has a prenup. Without one, the state writes it. State intestacy law decides who inherits and who settles the estate, and state divorce law decides how a couple's property gets split. Without a power of attorney, a family may need a court to appoint a guardian before anyone can pay a parent's bills. So the choice is between the state's version and one the family writes for itself.
Where my parents live changes the answer
Three different taxes can apply when someone dies, and people mix them up.
- Federal estate tax. Paid by the estate, before anything goes to the heirs, on the total value above an exemption. For 2026 the exemption is $15 million per person, or $30 million for a married couple, and the top rate is 40%. Most families never owe it.
- State estate tax. 12 states and Washington, D.C. have their own estate tax: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington. Their exemptions are usually far lower than the federal one. Washington's is about $3 million, so an estate well under the federal line can still owe state tax.
- State inheritance tax. Paid on what each heir receives, with the rate set by the heir's relationship to the person who died. 5 states have one: Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. Spouses are exempt in all 5. Children are exempt in most of them, but Pennsylvania taxes children at 4.5% and Nebraska at 1% above $100,000. Maryland is the only state with both an estate tax and an inheritance tax. Iowa's inheritance tax ended in 2025.
The state that usually matters is the one the parent lives in, plus any state where they own real estate.
New Jersey shows how this plays out. It repealed its estate tax for deaths on or after January 1, 2018, and a lot of people heard that as "New Jersey doesn't tax inheritances anymore." The inheritance tax is still in force.
The New Jersey inheritance tax depends on who inherits. The size of the estate doesn't set the rate.
- Class A (spouses, children, grandchildren, parents, stepchildren) pays nothing.
- Class C (siblings and a child's spouse) has the first $25,000 exempt, then rates starting at 11%.
- Class D (everyone else, including nieces and nephews) pays 15% from the first dollar once the share reaches $500.
The return is due 8 months after death, sooner than most people expect, and a closely held business interest needs financial statements and a date-of-death valuation.
Every state is different. The point is that the plan depends on how the parents' state treats the people who would inherit.
The file I'm building for my own family
I'm working on my own "when I'm not here anymore" file, so my family isn't left guessing. It lists the accounts and where they are, the insurance policies, the will and where the original sits, the lawyer and accountant to call, passwords, and the handful of things only I know today.
It's the same document I'd want from my parents. Building mine first gave me an easy way to bring it up with them.
How the conversation usually starts
A calm moment and a reason that's about them tends to go better than a list of questions. A few openings that work for a lot of families:
- "I just updated my own will and beneficiaries. Have you looked at yours recently?"
- "If something happened, I'd want to do things the way you'd want. Can you walk me through it?"
- "A friend's family had a hard time finding their dad's accounts. I don't want that for us."
A short first talk that goes well does more than a long one that goes badly.
What to learn over a few conversations
- Where things are. Banks, retirement accounts, insurance policies, the will and the deed. Institutions and locations, not necessarily balances.
- Who decides. Who they've named as power of attorney and healthcare proxy.
- Their wishes. Staying at home, moving closer to family, or a care community, and how they feel about medical care near the end of life.
- Their income. Social Security, pensions and retirement withdrawals. If they're 65 or close to it, Medicare Basics covers the health insurance side.
- Their advisors. Names and phone numbers for their accountant, lawyer and financial advisor.
What tends to backfire
- Leading with numbers. "How much do you have?" puts people on defense.
- The whole family at the first talk. Too many people turns it into a meeting.
- Taking over. Offering help is different from taking control. They're adults making their own choices.
When they won't talk about it
One small ask often lands better than the big conversation: a written list of where their documents and accounts are, sealed if they prefer, kept somewhere a family member can reach. That alone can save weeks of searching later.
Some signs mean help is needed sooner: unpaid bills, unusual withdrawals, new "friends" involved in their money, or confusion about routine tasks. Scams aimed at older adults are common, and a family member who notices early can stop a loss.