Watching parents grow older can be an emotional process for many people, particularly if you are unsure whether or not your parents are truly prepared for their future. The conversation about estate planning for elderly parents is a delicate one, but one that you should be prepared to have.
Either through employment or entrepreneurship, your parents may have worked and saved during their youthful years to have enough to cater for their needs during retirement and even splurge along the way. But do you know if they have a plan in place for what will happen when they pass?
The unfortunate reality is that death can sometimes result in financial hardship and strained relationships between the bereaved if the deceased passed away without leaving a will. This is why it is crucial to think about estate planning for elderly parents as early as possible. Though it can be a complicated and emotional subject to bring up, it can save your family a lot of stress in the long run.
How to Begin Estate Planning for Elderly Parents?
Initiating a conversation about estate planning for your parents can potentially be uncomfortable. This is why only 32% of Americans have one or more documents regarding estate planning. Nonetheless, it is a conversation that you have to have.
Here are some tips for handling that conversation:
1. Don't Put it Off
Death can come at any time, and waiting till your parents are unwell may not be the best time to broach the subject. This is why it is best to initiate the conversation early. Choose a moment when they are happy, preferably after a family gathering, and speak to them.
Instead of going straight to the point, bring up the subject lightly. A great way is referencing a case of a loved one who passed away and the challenges the family faced with such matters. Alternatively, you can let them know that you might have to make decisions for them one day, and you would like to know what they prefer.
2. Ask Them If they are Working With an Estate Planner
If your parent is responsive about the subject, find out if they have an estate planner and help them find one if they don't. This should be the first step, and it's arguably the most important one. Before you begin the search for an estate planning lawyer, consider your particular needs. Doing so will give you clarity on the type of estate planning lawyer to hire.
3. Involve the Whole Family
Matters estate planning and succession are complex because they involve many different parties. Even with the best intentions, following it up alone with your parents may cause friction. Inform your siblings and other relatives who may have an interest, so that they may be part of the process.
When everything is done openly, and with all parties' input, there will be little chance or reason for anyone to dispute the final will.
- Determine What You're Looking for and Assign Responsibilities
One of the biggest misconceptions about estate planning for elderly parents is that it's just about succession. As your parents continue to age, they will require more support from you and other loved ones. Such support may extend to assistance with day to day tasks and making crucial decisions on their behalf.
An estate plan covers incapacity planning and death planning to ensure that they are well taken care of when most vulnerable. With incapacity planning, the focus is on your parent's wishes and decision-making if they are unable. It covers:
- Healthcare- One of the loved ones is appointed as the 'healthcare surrogate' to make decisions about your parent's health needs on their behalf.
- Living Will- This is different from the last will. It outlines your parent's wishes on healthcare matters, including aspects such as organ donation and life support.
- Power of attorney- The person issued with power of attorney will be responsible for making your parent's financial decisions.
Once incapacity planning is complete, the next phase is death planning. This involves:
- The last will- This document outlines to whom your parent's property will be distributed.
- Find out if a trust has been established- A trust is a fiduciary relationship in which an individual gives a trustee the right to hold property or assets for the beneficiary. Trusts are not necessary for the estate planning process, but they can be helpful as they can protect family funds from taxes and fees.
Always Pay Attention to Your Parents’ Needs
Estate planning for elderly parents should be more about their needs than their assets. Make sure that they are comfortable with the process, and any concerns are addressed. Remind them that they are not alone and encourage them to ask for help. More importantly, you should help them find a reliable and experienced estate planning attorney.
Consultant with an Experienced Estate Planning Attorney Today
Estate planning can be a complicated process to navigate alone. Working with an experienced estate planning attorney is a worthwhile decision that will also reduce the chance of error when working on estate planning for elderly parents. For further guidance in your estate planning process, consult with an experienced estate planning attorney today.