Estate Planning Blog Articles

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Can I Protect My Elderly Parents?

Estate planning requires the ability to be realistic about current health and assets, while considering the inevitable changes to come. For adults with aging parents, having a well-thought out estate plan, regardless of the size of the estate, becomes more urgent as the time to use the documents draws closer. A recent article, “Accessing needs of aging parents,” from The News-Enterprise explains the steps adult children need to take to protect their parents.

There are four key factors to consider: medical needs, housing and care needs, finances and legal needs. All require candid, non-emotional assessments.

Start with medical, housing and care needs. Consider the next five years. Is it likely their medical condition may decline? How will their present home work, if they are unable to manage steps or need to sleep and toilet on the same level? If their home is not conducive for aging in place, will they consider moving to a better situation—or can they afford to make any changes?

Next, examine health and care needs. Do they have long-term care insurance or do they expect to apply for Medicaid? If one spouse will need memory care or one spouse dies, will the surviving spouse have the resources needed to remain in home and receive the care they need? An experienced estate planning attorney will be able to evaluate their financial situation with regard to becoming eligible for Medicaid, if this will be needed. There is a five-year look-back period for Medicaid, so advance action is necessary to protect assets.

Do they have any estate planning documents in place? Is there a will, and when was it prepared? Ask any estate planning attorney how many times seniors have told their children a will exists, only for the children to learn the will is forty years old, woefully out of date and declared invalid by the probate court. Deceased individuals may be listed as agents for Power of Attorney and Medical Power of Attorney. Funds left for heirs may no longer exist. Laws for power of attorney may not include required provisions as a result of changes to the law.

More complicated issues may exist. If appreciated real estate property has been deeded to loved ones to protect the property from nursing home costs, are the beneficiaries prepared to pay the resulting taxes? If deeded real estate property was intentionally left unrecorded, transferring property could become a legal quagmire.

The best solution is to have an experienced estate planning attorney meet with the parents, review any existing documents and prepare an updated set of documents to achieve the parent’s goals, protect them in case of medical emergencies and allow parents and children to gain the peace of mind of knowing they are ready for the future. This includes a will, power of attorney, health care power of attorney, HIPAA release, living will and, depending upon the situation, may also include trusts.

Reference: The Times-Enterprise (Nov. 5, 2022) “Accessing needs of aging parents”

Tackling Estate Plan Quarter by Quarter

Most of us know that a tax bill is typically due on April 15, and we know that our paychecks will include deductions for taxes, Social Security, and IRA or 401(k) contributions. If we are self-employed or retired, we make quarterly estimated tax payments. We plan throughout the year to be better prepared when April 15 comes around. The preparation takes place routinely over time, and the same can be done for estate planning and updating, says a recent article “Make quarterly payments to estate plan” from Victoria Advocate. It’s simple and sensible.

If we can make our plans today to make our eventual passing easier for loved ones and friends, why not divide and conquer, in a quarterly manner? Consider these quarterly “payments” to your estate plan and your family:

First Quarter: Review current estate plans with your estate planning attorney. Don’t have an estate plan? Get started. An estate plan includes a Will, Durable Power of Attorney, Medical Power of Attorney, Directive to Physicians document and any trusts you might need.

The Will, aka Last Will and Testament, is the only one of these documents to be used post-mortem. The will is used to designate an executor to carry out your wishes and designate a person or persons to serve as legal guardians for minor children.

Second Quarter: Let your family know your wishes. Open communication with family members is a gift, so they are not left guessing during critical times. Finding the right words is not always easy, so try writing out your thoughts as you prepare your estate plan. Document your wishes for burial arrangements, information they’ll need for a death certificate or obituary. Do you want to donate your organs, or will your pet need special care? Where are your important papers located? Once you’ve had all the necessary documents created and have thought through these wishes and written a memo about them, let your future executor know what your wishes are, and where they can find the information that they’ll need.

Third Quarter: Do some easy but important estate planning tasks. Review the beneficiaries listed on your accounts. Assets and accounts that pass through beneficiary designations are not controlled by the will, so this is extremely important if it’s been more than a few years since you last reviewed these documents. Your IRA, SEP, 401(k), life insurance and any accounts titled Transfer or Payable on Death probably have beneficiaries listed.

Fourth Quarter: Does your estate plan include a legacy to future generations or charities? Speak with your estate planning attorney about how to pass your estate to children or grandchildren. If you have a unique goal, trusts can be as individual as you are.

As systematically as you pay taxes and bills, work through your estate plan so that you are prepared for the two things we know will occur, regardless of how we feel about them—taxes and death.

Reference: Victoria Advocate (May 8, 2021) “Make quarterly payments to estate plan”

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