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Elderly parents need estate planning to ensure their wishes are clearly documented and legally enforceable to prevent confusion and conflict among family members. A solid estate plan can include powers of attorney, advanced healthcare directives, a will, and trusts. They all serve different purposes in ensuring their intentions are known and followed.
Children of aging parents are often faced with the task of helping them with estate planning. The two main aspects of estate planning for elderly parents or aging parents are what they want done with their property and what their wishes are for various potential medical situations. These conversations are difficult and only become more necessary to have as life progresses.
Talking about estate planning with your parents may be uncomfortable. Many parents are private when it comes to finances and their personal decisions, particularly when they are in regard to their own mortality. It’s important to have these conversations sooner rather than later because it only gets more complicated and difficult if they procrastinate too long.
There are many aspects of estate planning that require the person creating the will, trust, or other document to be of full mental capacity. If they are suspected to not be of sound mind, then that could call into question the validity of the legal document. This could lead to court challenges and ultimately wishes not being fulfilled if the court determines the documents are invalid.
It’s important to encourage aging parents to get their affairs in order, but legal documents can be declared invalid if the person was pressured by undue influence or the documents were signed without required witnesses or a notary. For this reason, it’s recommended concerned children should encourage their parents to seek legal counsel in estate planning, rather than help them complete a DIY service. Concerned parties helping their parents should remember estate planning is about making sure their wishes are documented, not anyone else’s.
Even close family members don’t have automatic authority to make financial or medical decisions without a Power of Attorney (POA). That means that even if you’ve been informally helping them at home, institutions like banks or hospitals can refuse to allow you to act on your parents’ behalf without official documents in place.
Without the official documents, family members are left needing to file a petition in court and go through a lengthy process of attempting to be appointed guardian or conservator for a parent. Most of the time when families are in this position, it is an urgent situation, which makes the slow legal process even more stressful.
A financial power of attorney allows a specified individual to manage the financial affairs of an individual. This includes paying bills and taxes, managing bank accounts or investments, buying or selling property, and other similar activities.
A durable financial power of attorney is specifically for when the principal (the person) is incapacitated, so these are important to have in place at any age. A general financial power of attorney has broad authority to manage financial matters. Some elderly individuals find this useful when they are not incapacitated but financial matters have become a little overwhelming.
Medical power of attorneys are also known as healthcare power of attorneys. A medical POA allows a specified person to make decisions about surgeries, treatments, medications, and other healthcare issues when the individual cannot make these decisions on their own.
In addition to a medical power of attorney, there are other advance directives to consider when it comes to health care decisions. Living wills and DNRs are often created together.
A living will expresses your wishes about specific end-of-life care or life sustaining treatments. It can cover choices regarding life support, pain management preferences, and organ donation, among other things.
A DNR, or a Do Not Resuscitate order tells healthcare providers not to perform CPR. It becomes part of your medical record and typically indicates no chest compressions, defibrillation, breathing tubes, or certain emergency medications when taking someone off of life support. It is important to note that DNRs are for when someone is in a vegetative state or has terminal condition, not when someone randomly has a heart attack.
Together, a DNR, living will, and medical POA form a comprehensive set of legal documents that help ensure your wishes are honored in medical situations when you cannot speak for yourself.
There are several ways to document your wishes. What’s right for you depends on your goals and needs. This overview will give you an idea of the common aspects of an estate plan, but a conversation with an estate planning attorney is the best way to know what methods are most suitable to achieve your goals and meet your needs.
A will is a legal document that provides instructions on how to distribute the estate when someone has passed. It’s important to note that wills on their own do not avoid probate. They also do not help with the Medicaid lookback period. Wills are often used in conjunction with trusts to offer more control, greater protection, and increased flexibility with how the estate is distributed.
Having a will is certainly still better than having nothing. Without a will, the estate is divided using intestate succession laws, which may not reflect the wishes of the deceased. For instance, stepchildren or unmarried partners are not typically included if there is no will. Wills help reduce family conflict and reduce the stress loved ones face when they must navigate the court system without knowing their deceased family member’s wishes. Or worse, knowing their wishes but not having a legal document to ensure they are completed as desired.
A revocable trust is a legal entity that manages and distributes assets while also avoiding probate. With a revocable trust, the creator can change or revoke the trust at any time. They can maintain control of the assets until they are incapacitated. Assets can be distributed over time based on milestones, and even complex assets can be managed within a trust.
Trusts only manage and distribute assets that are put into the trust, so this is often paired with a pour-over will that distributes any part of the estate not already in the trust to the trust upon an individual’s death.
Irrevocable trusts work similarly to trusts in managing and distributing assets, but with a few big differences.
The person who created the trust is no longer considered the owner of the assets. This protects the assets from creditors. It also is useful if you are depending on Medicaid for long-term care and don’t want the assets to be counted in the Medicaid lookback period.
However, these benefits come at the cost of losing direct control over the assets. An irrevocable trust cannot be changed, and the trustee has control over the assets instead of the creator of the trust. The trustee must follow the trust’s instructions. A trustee can be a family member, trusted friend, or a professional trustee.
Our estate planning attorneys are experienced in working with elderly parents. Contact us today to get started on your family’s plan.
