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Estate Planning Tips for Children of Aging and Elderly Parents

April 15

How an Elder Law Attorney Can Help Adult Children Plan for Aging Parents

Written by Thomas Upchurch

As parents age and face deterioration in physical health and mental capacity, estate planning and long-term care planning issues become all the more pressing. Unfortunately, many Americans delay this type of planning until problems arise. At that point, the aging parent may be unable to manage the process alone, or may even lack the capacity to execute legal documents.

While study and survey data varies somewhat, the general conclusion is consistent: far too many U.S adults have neglected estate planning. In 2017, Caring.com concluded that fewer than half of adults have a will or living trust. The numbers improve somewhat with age, but not nearly enough. Just 60% of those aged 53-72 had made such provisions.

Somewhat surprisingly, the study revealed that more people had some sort of medical directive or power of attorney than had wills and trusts. Still, 47% of adults had not granted anyone authority to make medical decisions if they were incapacitated. 83% of those over the age of 72 reported having made such arrangements. While that number is encouraging compared with rates among younger adults, that remaining 17% could include hundreds of thousands of older adults in Florida alone.

The sooner adult children take steps to assist their elderly parents in creating a comprehensive estate plan, the better. Thorough preparation can alleviate everything from stress and family conflict to serious financial pitfalls.

The Pitfalls of Failure to Plan

Some of the pitfalls associated with failure to create a comprehensive estate plan include:

  • Property passing to someone other than the person the elder would have chosen, or assets such as the family home being sold to pay creditors and distribute assets to beneficiaries
  • The elder’s wishes about end of life care being unknown, or family members disagreeing about what the patient would have wanted
  • Someone making medical decisions for the elderly patient whom the elder would not have chosen, and who is unfamiliar with his or her wishes or may choose to override them
  • Adult children being unable to access an elderly parent’s accounts to take care of business such as making mortgage payments and updating vehicle registration while the elder is incapacitated
  • Conflict among family members regarding medical care, management of finances, distribution of assets and other issues
  • Lack of access to long term care or dissipation of the elder’s estate to pay for long term care

While many elders and their family members are aware of the importance of estate planning, including long-term care planning, many simply don’t know where to start. Do-it-yourself solutions such as will forms and online power of attorney generators are only useful if you know what you’re looking for, and can create more problems than they solve if you aren’t familiar with the underlying legal issues and technical requirements.

In addition, many adult children are uncomfortable raising issues of the estate planning provision for medical care and long-term care planning with their elderly parents.  Some simply don’t want to discuss end-of-life issues and contemplate their aging parents passing on or becoming incapacitated—or fear that such topics will upset older loved ones. Others may come from families in which finances were not discussed openly, and so feel that raising many of the necessary questions is somehow inappropriate. Some may even fear that parents will mistake their concern for self-interest and assume that they are suggesting estate planning to ensure that they get their inheritance.

A Florida Elder Law Attorney Can be Your Best Resource

Whether you are unsure how to assist your aging parents with estate planning, uncertain about how to handle the discussion, or both, an experienced elder law attorney can help. An attorney who is experienced in estate planning for elderly parents can guide adult children and their aging loved ones through the process of protecting assets, determining how to pass property after death, ensuring that the right decision-makers are appointed for both medical and financial issues, and preserving access to long-term care.

The attorney can not only assist in the creation of documents and resolution of issues you raise, but also ask questions and provide information to help ensure that you haven’t overlooked important aspects of the estate plan. And, in this process, the lawyer can take some of the pressure off of family members by being the one who guides the discussion and asks the questions some adult children find difficult or awkward.

Estate Planning for Elderly Parents

Elderly parents who haven’t already made provisions face the same estate planning issues as any adult. The key difference is that the risk of delay is more significant, and increases rapidly as the parent grows older and medical conditions or cognitive challenges develop or worsen. Core estate planning issues include:

  • Creation of a will or living trust to pass property after the senior’s passing: an experienced estate planning lawyer can explain how wills and living trusts work and help determine which is a better option for your family. Then, the attorney will ask detailed questions to help ensure that nothing is overlooked.
  • Appointment of a personal representative or trustee to manage that transition: while the decision as to whom to appoint is a personal one, your attorney can provide valuable guidance as to the factors and characteristics you should consider. Default selections such as the oldest child or person closest to you aren’t necessarily the right ones for everyone.
  • Creation of an advance healthcare directive: An advance healthcare directive (sometimes known as a “living will”) tells doctors and other medical providers how you would like them to handle specific situations, such as whether you want extreme life saving measures.
  • Appointment of a healthcare surrogate: A healthcare power of attorney grants the person you choose authority to make medical decisions for you if you are unconscious or otherwise incapacitated. An advance healthcare directive can’t address every possible scenario, so it is generally advisable to use these documents in combination.
  • Appointment of a general or financial attorney in fact: Power of attorney enables a family member or other trusted person to conduct business on your behalf if you should become incapacitated, from depositing checks you receive into your bank account and making your mortgage payment to more complex financial matters that may arise if incapacity endures. It is important to choose not just a person you trust, but one who has the necessary skills and knowledge to manage your financial affairs.
  • Long-term Care Planning: Long-term care planning is a critical and often overlooked element of estate planning, and is discussed in greater detail below

Long-Term Care Planning

While most adults are aware that they should have a will or living trust and certain other estate planning documents such as an advance healthcare directive, long-term care planning is often entirely overlooked. In part, that’s because few of us anticipate living out our final days in a nursing home, dependent on Medicaid. But, according to the Kaiser Family Foundation, Medicaid picks up the tab for 4 in 7 Florida nursing home residents—more than 57% of those in long-term care facilities.

For most people, the alternatives are to pay the bill directly or to prepare with some type of private long-term care insurance. The median cost of a semi-private room in a Florida nursing home is nearly $90,000 per year, putting private pay out of reach for most people. But, Medicaid eligibility depends in part on the patient’s assets, and the limit—with the exception of some protected equity in the family home—is low. And, by the time the family realizes that long-term care is required, it is typically too late to engage in the most effective types of long-term care planning. That’s because in assessing a Medicaid application, the state will look at transfers dating back five years from the date of the application.

If uncompensated transfers such as gifts to adult children are discovered, the state will essentially treat eligibility as if the elderly person still had those funds. So, if the applicant transferred $45,000 to his adult daughter to help her make a down payment on a house one year prior to applying for Medicaid for long-term care, he will be disqualified for as long as it would take to exhaust those funds at the average Florida nursing home—in this example, about five months.

A skilled elder law attorney may be able to minimize the damage if your family is already in this situation, or you know that long-term care is likely to be needed soon. However, planning well in advance is the best way to avoid the transfer penalty and ensure access to the care  your loved one needs.

The Next Step is Talking with an Elder Law Attorney

The exact concerns and necessary measures vary somewhat from person to person. However, regardless of whether your elderly parent has no estate plan, has some documents but is lacking other protections, is thinking ahead or is already facing a crisis, one thing is consistent: talking with an experienced elder law attorney is your best first step.