Thinking about the possibility of your parent’s death or incapacitation can be difficult to say the least. However, it is something you need to do, as it is the only way to ensure your parents’ wishes are carried out after their passing and their assets are managed, divided, and distributed as per their instructions.
Talking to Your Elderly Parents About Estate Planning
First and foremost, you need to talk to your parents about the need for estate planning and find out what they think about it. Generally, elderly people tend to put off estate planning because they do not understand just how important it is or because they believe that it is not the right time to do it.
Tell your parents about probate and help them understand that in the absence of an estate plan, their assets would be divided and distributed by a court-appointed executor – not by someone they love and trust. More importantly, tell them that creating an estate plan is the only way to make sure that their wishes are taken care of after their passing.
If you have siblings and other family members whom your parents might want to pass on their assets to, make sure you involve all of them in the process. Your parents need to know that all of you are on the same page regarding the need for an estate plan.
Be patient with your parents, address all their concerns, and make sure they are not pressured or forced into doing anything they do not like.
Determining Your Parents’ Estate Planning Needs
Once your parents are ready to create an estate plan, you need to determine their estate planning needs.
- Do your parents have a list of beneficiaries that they want to pass on their assets to?
- Do your parents want to pass on all their assets to their beneficiaries?
- Do they want to leave some assets to charity?
- Do they want their assets to be divided and distributed equally to all the beneficiaries?
- Is there a beneficiary with special needs or some other kind of disability who might need lifelong care?
These are some of the questions you need to ask to determine your parents’ estate planning needs.
Creating an Advance Healthcare Directive
Talk to your parents about what should be done in the event of their incapacitation and create a plan for the same.
Firstly, ask your parents to choose someone as their healthcare agent who can make medical and healthcare decisions on their behalf. It can be you, one of your siblings, or anyone else that your parents trust completely. It’s a good idea to ask your parents to choose an alternate healthcare agent who can make decisions on your parents’ behalf if the primary designee is unavailable, unwilling, or incapable of doing so.
Secondly, make a list of your parents’ healthcare preferences. The most important questions you need to ask your parents include:
- Do they want palliative care?
- Under what circumstances do they want to be resuscitated if their heart stops?
- Do they want to be put on a ventilator if they are unable to breathe? If so, for how long?
- Do they have any specific preferences regarding the type and level of medical care they want to receive?
- Do they want their organs to be donated?
Creating a Financial Power of Attorney
Talk to your parents about who should have power of attorney over their finances in the event of their incapacitation. Ask them to choose someone who can handle their financial affairs and make decisions on their behalf. As is the case with the advance healthcare directive, it’s necessary to designate an alternate agent who can take control of your parents’ finances if the primary agent is unavailable, unwilling, or incapable of performing their duties.
Creating a Trust
A trust can help your parents manage their assets while they are alive and of sound mind and make sure the assets are managed, divided, and distributed as per their instructions after their passing. The biggest advantage of a trust is that it eliminates the need for probate completely.
Depending on your parents’ needs, you can set up a revocable or irrevocable trust. You can consult with an experienced California estate planning attorney to decide what kind of trust might be the right choice for your parents.
Need an Estate Plan for Your Aging Parents? Let Us Help You
At Garmo & Garmo, we know how important it is for aging parents to have an estate plan in place. We can talk to your parents, understand what they are trying to accomplish by creating an estate plan, and create a customized plan which is best suited for their needs. We have over 80 years of estate planning experience and can provide you with the specialized guidance you need at every step of the process.