Through a variety of legal documents, it is possible for your parents to ensure that their financial and health care preferences are executed even if they are unable to exercise control themselves in a crisis. Prearranging important “end-of-life” decisions offers great peace of mind to you, as their caretaker, but especially to your parents.
Unfortunately, not everyone approaching their latter years is prepared in this manner. How can you help your parents address this issue ahead of time? Here are a few suggestions to get you started:
- Educate yourself about estate planning. A guide to end-of-life is available online, along with articles about financial/legal planning.
- Discuss the legal protection provided by various documents. (See document descriptions further down.) Provide enough information to help them decide what they need.
- Find out if your parents have a trusted attorney to handle estate planning and other legal matters. If not, choosing a lawyer who is experienced in elder law simplifies the process and helps to prevent problems and disappointments. Some attorneys specialize in the following issues:
- If your parents don’t already have an attorney, here are a few suggestions for finding one:
- Ask friends and other contacts for attorney recommendations.
- Check for free or reduced-cost legal aid through:
- Government agencies
- AARP’s Legal Services Network
- Google the state and county Legal Aid Bureau, Society, or Service where your parent lives
- Shop around for an attorney, asking the following questions:
- What will different services cost? Flat fee or per hour?
- What about miscellaneous fees?
- Free initial consultation?
- Experienced in the end-of-life matters?
- When will the attorney be available for consultation?
- Is the attorney’s demeanor positive, respectful, kind?
- Does he/she seem knowledgeable and conscientious?
- How do his/her references check out?
Discuss Financial Protection Measures
- Know where to find personal and financial documents in an emergency.
- Ask your parents’ bill companies to notify you if they miss their bill payments.
- Suggest that your parents switch to direct deposit for Social Security and other benefit checks.
- Ask your parents to share their financial information and responsibilities with you and other pertinent family members.
Discuss and Establish Legal Protection Measures
Banking access − Have your parents assign an adult child as joint owner of their bank account and other financial accounts so that he/she is authorized to act for them in an emergency. They should also appoint someone as a joint renter or deputy/agent of their safe deposit box.
Durable power of attorney (DPA) − Have your parents give another person the authority to make financial decisions on their behalf. Otherwise, the court would have to appoint a guardian to manage their financial affairs. The DPA normally goes into effect as soon as it’s signed, but it can be specified to only go into effect if a doctor certifies that they are no longer able to make their own decisions.
Revocable living trust − This document enables your parents to direct how their property will transfer after their death, and to whom the assets will transfer. While attorneys charge more to write living trusts than wills, and there is a charge for funding and maintaining the trust, living trusts have the advantage that the property does not pass through probate but goes quickly and privately to the beneficiaries. They also take effect during your parent’s lifetime, when he/she transfers ownership of the property to the trust.
Will − This document dictates how your parents’ property will be distributed after they die. Probate, the process for legally transferring property from an estate to the will’s beneficiaries, takes place in the state where your parent resides and may require from six months to several years to complete. In addition, there are taxes and fees to be paid by the estate. Certain strategies help to avoid the disadvantages of wills, such as:
- Life insurance can be made payable directly to the beneficiaries rather than the estate.
- Joint tenancies (joint ownership) can be established with a right of survivorship (the property goes directly to the survivor).
- Living trusts
Advance directive − a collection of documents about your parents’ health care wishes. It may include the following documents:
- Health care directive
- Health care proxy
- Health care power of attorney (HCPA) − A document which gives another person the power to be your parents’ advocate and make decisions regarding their medical treatment and other health/personal care. It is only effective if your parents are temporarily or permanently unable to make their own health care decisions
- A living will − More limited than the HCPA, this document directs the doctor to withhold or withdraw life-sustaining treatment if the patient is diagnosed with a terminal condition and unable to state his/her preference. This document also steers an agent (such as the DPA) in making difficult decisions and improves the chances that the doctor will follow the patient’s wishes.
Work through Sensitive Decisions
Here are some questions to prod the discussion about an advanced directive along:
- Who do you want to make medical and financial decisions on your behalf?
- In the event of a terminal condition, are there life-sustaining treatments you would or would not want?
- Given a choice, where would you want to die (at home, in a hospice)?
- What do you want done with your property after you die?
Take precautions to ensure the advance directive will be followed:
- Talk with the doctor before creating an advance directive for his/her input, and afterwards to make sure the doctor understands your parent’s desire.
- Make certain the documents follow the legal format for your parent’s state.
- Inform everyone who may need to know about the documents (family, friends, spiritual advisors, nursing homes, hospitals).
- Make copies of the documents and distribute to doctors and other necessary agents.
An article entitled “Talking to a Loved One About Death” provides thoughtful insight on the subject.