Discussing estate planning with aging parents can be difficult — but it’s important to have this conversation while your parents are still healthy and of sound mind. Estate planning doesn’t only have to do with how assets are distributed after a parent’s passing, but it also ensures a plan for incapacity is in place if they become ill and cannot handle their own affairs. If basic estate planning documents have not been executed, a court may need to make certain determinations regarding your parents’ care and financial matters. Unfortunately, the decisions a judge will make in accordance with the law might not always reflect your parent’s wishes.
No one wants to think about a loved one’s passing, and bringing up the topic of estate planning with aging parents isn’t easy. But it’s critical to have this talk while your parents are in good health to ensure their future wishes are carried out. You should not wait to have this conversation until your parent’s health is failing and they are no longer able to communicate their estate planning goals.
Important topics to cover when it comes to estate planning for elderly parents can include the following:
Starting a dialogue with your parents about their estate plan is the first step to preserving your family’s legacy and passing these values on to future generations. But the conversation should not stop there — a knowledgeable estate planning attorney will know how to implement your parents’ objectives by creating a comprehensive estate plan that can withstand potential legal challenges.
Talking with your parents about the benefits of creating an estate plan and making sure they have the legal assistance they need to fulfill their objectives can go a long way. Not only can an estate plan eliminate the potential for disputes among siblings, but it can also help to ensure that aging parents are well cared for in the future and have the medical support they will need.
It’s essential to understand that an estate plan can do much more than distribute property after death. Depending upon the strategies that are implemented, it can help a family avoid the lengthy probate process and keep a family’s financial affairs private. There may also be certain tax benefits to creating an estate plan, which can allow the majority of assets to be passed to heirs. Significantly, a well-drafted estate plan can allow the decedent to remain in control of the way their property is handled after their passing and how their assets will be distributed.
A comprehensive estate plan should also include a plan for incapacity. There are specific legal documents that can be drafted to communicate healthcare preferences and provide instructions for medical treatment that should be rendered in the event of incapacitation. In addition, if a parent does not have long-term care insurance, they might benefit from Medicaid planning which can help to ensure the best possibility of Medicare eligibility.
If you’re preparing to speak with your aging parents about estate planning, it can be useful to have a basic understanding of the types of documents that may need to be executed. Every estate is unique and there are a wide variety of tools that can be used, depending upon one’s estate planning goals. An experienced estate planning attorney can best advise regarding the documents that should be executed based on a family’s dynamics and financial situation. At a minimum, every estate plan should include a will and powers of attorney — these documents provide someone else with authority to make medical and financial decisions in the event of incapacity.
A last will and testament is the foundation of every estate plan. This document outlines the beneficiaries who should inherit specific assets and property upon the testator’s passing. It can include instructions for the distribution of personal property, real estate, and investment accounts. A will can also name an executor who would be responsible for carrying out the wishes conveyed in the instrument. However, a will alone does not avoid the probate process in California.
There are many different types of trusts that can be used as part of an estate plan, including revocable and irrevocable trusts. These arrangements can allow the grantor’s assets to be managed by a third party on behalf of a beneficiary. While irrevocable trusts can pass assets outside of probate, protect generational wealth, and keep assets out of the hands of creditors, revocable trusts can be a vital incapacity planning tool.
In addition to a health care power of attorney, a financial power of attorney, and a revocable trust, another incapacity planning document that every adult should have in place is an Advance Health Care Directive. This document is a statutory form in California that allows for the designation of an agent to make medical decisions if your aging parent does not have the capacity to do so for themselves. This form can also select health care institutions, specify end-of-life decisions, direct the provision of life-sustaining treatments, and authorize the donation of organs.
Estate planning for elderly parents can be emotionally overwhelming and stressful. A compassionate and skillful attorney can help make the process easier for individuals and their families. With over 20 years of experience, the Law Offices of Rick D. Banks works with clients throughout Fresno and the surrounding area for a wide variety of estate planning matters. To schedule a no obligation consultation, call (559) 222-4891.