The Changing Needs of Aging Parents
Compliments of Litherland, Kennedy & Associates, APC, Attorneys at Law
Written By: The American Academy of Estate Planning Attorneys
Odds are, before your parents retired, they’d already put many plans for the future into place. From contributing to a retirement plan for decades to ensuring proper life insurance policies were in place, there’s a good chance your parents wanted to eliminate some of the obstacles that can plague the aging process. But is it enough? How can we ensure the changing needs of aging parents are being met?
One of the biggest challenges of getting older is healthcare. It can only take one major illness to result in the loss of everything they worked hard for. Medicaid planning can eliminate that concern depending on your parents’ assets and income. However, there are a few compliance issues that come with that qualification. A five-year look back period for example, is one of those issues. This simply means any gifts or transfers of assets made in the past five years will be closely scrutinized and it could result in a penalty or even a period of ineligibility. Proper planning with a qualified Estate Planning and Elder Law attorney can help avoid that scenario.
Don’t underestimate the power of Trusts. These financial and estate planning vehicles are effective ways of ensuring a family’s wealth is protected from creditors, taxes, spend down rules associated with Medicaid qualification, ex-spouses and more. They are also used to ensure wealth is passed to more than one generation. It’s important to choose a qualified estate planning lawyer who can help your parents put those protections in place.
Another important element is the power of attorney. These legal documents allow your parents to name someone to make decisions on their behalf should they become unable to do so. A financial power of attorney names a trusted party to cover financial considerations, such as paying the monthly utilities, insurance policies, automobile payments, etc. – either on a temporary or permanent basis if they are incapacitated. The medical power of attorney allows them to name someone to make medical decisions on their behalf if they are incapacitated. A living will should be part of that planning element as well.
One of the bigger challenges is actually initiating the conversation. It can be awkward and even uncomfortable; however, many find that their parents are open and even relieved that it’s finally on the table. Remember, you and your parents share a common goal of ensuring their retirement years are worry-free and enjoyable. Once you open the door to these conversations, it becomes easier to discuss in an honest and loving way. Be sure a qualified estate planning attorney is part of the team so that there are no vulnerabilities or overlooked details.