Planning Ahead: Financial Management and Healthcare decisions for aging adults
One of the hardest conversations you’ll ever have with your parents is about planning for the future and the possibility of needing and paying for care. The next time you have a family gathering, one of the best things you can do for yourself and for your family is to engage everyone in an honest and open discussion about aging and disability planning. Many adult children and their parents think about the potential for incapacity, but the majority of them never bring up the matter with each other.
Your Financial Situation
One of the biggest worries for parents and their children is money. Parents and children each worry about whether the parents will have enough money so they can enjoy their retirement and, if necessary, pay the costs of long term care. Maybe this is a conversation you also want to have with a financial planner to make sure you have covered all the bases. A family discussion about this matter can take the fear and emotion out of this topic for both parents and children.
Who Will Handle Your Finances If You Become Ill?
Decide who you want as your agent to handle your finances if you are incapacitated and how you want your finances managed, When you have made these decisions, share this information with your loved ones. And, seek out an experienced elder law attorney who can prepare a Durable Power of Attorney, a document that will specify your wishes and can be used by your agent for bill paying, managing your retirement and insurance benefits, and anything else that may be necessary.
Who Do You Want To Help You Make Medical Decisions And What Types of Life Support Do You Want If You Are Seriously Ill?
Discuss these matters with your loved ones and put them in writing in an Advance Directive for Health Care. This document names the person you want to make and communicate your wishes and addresses your choices concerning what type of medical intervention and life support you want if you are seriously ill.
Making this discussion a family affair. Get everyone in on the conversation and on board with your wishes. By openly discussing and sharing your thoughts and concerns with your family, both you and your loved ones can learn how to face and plan for the challenges of aging together, without creating undue stress or burdens.
Knowing the Basics About Planning Ahead and What Do The Terms Mean:
Enjoying retirement, traveling, spending time with family or exploring new activities and interests are part of growing older. But age can also bring with it anxiety and worry and some unique concerns about health and well-being and taking care of family. These concerns are usually grouped together in an area of law known as “elder law”. The following is a thumb-nail of topics that an elder law attorney can help with.
Estate planning is really caring for your loved ones, seeing that they are provided for, and making sure your property is distributed according to your wishes. This can be accomplished through a variety of techniques, including wills and/or living trusts.
Durable Power of Attorney
A person can appoint someone else to manage his financial affairs if he is unable to do so. This Durable Power of Attorney is a preferred way of providing for the proper management of one’s financial affairs in the event of incapacity.
Advance Directive for Health Care
A person can give health care instructions to his physician and name a person to make health care decisions, such as the selection of hospitals, doctors or type of medical treatment, if he is unable to make those decisions for himself. This is called an Advance Directive for Health Care. This document also allows a person to give specific instructions about life support measures.
Guardianship & Conservatorship
If a person becomes incapacitated and has done no advance planning, the only legal means by which even a family member can take care of that person is to petition the court for the appointment of a guardian and conservator. This process is an ongoing and court controlled proceeding that is time consuming and expensive. It is the least desirable way of property and personal management.
Medicaid eligibility rules are complex and ever changing. Strategies for long term care planning and asset protection are always in a state of flux. An elder law attorney can guide you and your family through the many challenging issues that arise as life circumstances change.
Healthcare crisis management is one of the biggest reasons people seek out an elder law attorney. But, the best time to find an elder law attorney is before a crisis. Advance planning avoids many problems, and helps achieve peace of mind for yourself and your loved ones.
Top 10 Estate Planning Issues
As an Elder Law attorney, I am often asked “What is the biggest estate planning problem?”. My answer, “Failing to start”. The following is a list of issues to think about when preparing your estate plans. Almost all issues can be taken care of with a little thoughtful consideration, but the same issue can also create major problems if not dealt with in advance.
Court supervised administration of your estate is never a pleasant journey. Despite the helpful court personnel, there are still filing fees, lack of privacy issues, and long waiting periods before distribution. And that’s if all goes well.
This is never an easy issue as the various tax systems don’t always line up with each other. Consider the tension between gift planning, (giving away some of your assets) to shelter appreciation by moving them outside of your estate, and loss of basis for capital gains purposes. While not easy, this issue can really cost you money if not properly handled.
The best way to control legal fees is to incur them while you are alive and able to oversee the planning process. Failure to plan is likely to increase the total amount of fees paid. Especially if family members decide that fighting is the best way to resolve disputes after you’re gone.
Make plans for your estate in the event that your immediate family members die and are unable to inherit your estate. Pick a charity or a group of more distant relatives or close friends.
Often used as a convenience during life and a will substitute at death. Because these accounts go to the survivor, make sure that this lines up with your overall plan of passing assets to your heirs.
Leaving money in a joint account for one child with the idea that they will spread the wealth around after your death can be a recipe for disaster.
Many people do not take advantage of the asset protection opportunities that can be achieved with relatively basic estate planning. Creating trusts for spouses and children with the right provisions means your assets can be protected from claims of creditors and predators for years to come. While we hope that our children would not fall victim to divorce, this is one asset protection conversation that must be planned for.
Estate planning is a way for you to say you care about your loved ones, but selection of your personal representative or trustee can also stir the pot and create issue issues for those not chosen. Sometimes it is best to name a non-family member to be in charge of your estate. Giving thought to how to help resolve these conflicts or at least, not make them worse, can help to avoid family conflicts.
Make sure that you name back up personal representatives and trustees, or provide the beneficiaries with a way to fill a vacant role, so that a court proceeding is not required.
Updating Beneficiary Designations
Life insurance and retirement accounts are controlled by the beneficiary designations you make when you purchase the life insurance or open a retirement account. They are most notably the small boxes you checked at the end of your application. Make sure these stay updated.
We have seen more than once a policy which still names a client’s first wife or husband many years after a divorce and remarriage.
Failing to start
Procrastination is probably the leading cause of problems in estate planning. Once a disability or death occurs, planning becomes very difficult and lots more expensive, if possible at all.