What Are Important Things To Consider When Planning For Aging Parents?
The first important consideration when planning for aging parents is who will control which assets. It is important to determine who will be in control of the finances and the medical conditions, who will determine where the assets are located and where they should go, and what the parent’s wishes are in terms of care. Call our office for our “How to Select a Trustee” handout to aid you in this decision making process. Remember, your inability to pick someone is not a reason to put off making tough decisions when planning ahead. When you do not make a decision, your family and beneficiaries are left to fight amongst themselves, or in the event, if you do not have close family, you could become a ward in a guardianship and have a random third party appointed to make decisions for you.
The next question to consider is whether or not there are checks and balances on asset management. In situations where there are family dynamic issues between children, parents, other siblings or caregivers, a discussion will need to be had about checks and balances and communications in order to alleviate the risk of potential estate-related conflicts, litigation or claims in the future. Excluding obvious family contention, conflicts can occur in closer families due to poor communication or lack of information.
The third important detail to consider is the prioritization of payments on behalf of the parent once a caregiver has control. Is the parent’s primary goal to protect money for the purposes of inheritance for beneficiaries, rather than payments to nursing homes? The person who is in charge of the finances has the option to spend all of the money on the parent so that the aging parent will receive a high quality of life. Another prioritization issue has to do with how the money will be spent. Will it all be spent on in-home care, which can range between $15 and $20 per hour? If the rate is $20 per hour, then that would amount to about $13,000 per month for around-the-clock care. If it is decided that a nursing home or assisted living environment would be better than in-home care, then the next step would be to decide where the parent will receive care. It will be important to consider whether or not there are certain acceptable caregiving options.
The last important detail to consider is how the parent wants to be treated throughout the process. Some may want caregivers to put forth assertive and proactive efforts to enhance their quality of life. Alternatively, it may be the aging parent’s wish to let things progress quickly without undergoing procedures that just slow down the dying process. It’s good to have a conversation about the level of diligence the parent would want in his or her care.
What Is A Durable Power Of Attorney? What Role Does It Play In Planning For Aging Parents?
A durable power of attorney is a legal instrument that gives the caregiver the ability to manage, sign and otherwise authorize any and all financial transactions for the aging parent. This means that the caregiver with the power of attorney has the ability to deal with all bank accounts, real estate transactions, health-related transactions, auto and property insurance transactions, investment-related transactions and retirement plan transactions. The caregiver would be allowed to pay all of the bills, deal with all of the creditors and bills, and deal with certain aspects of advanced asset protection planning. The durable power of attorney is the most crucial legal document that is required in asset protection.
In 2011, the Florida durable power of attorney statute was amended to require that most powers of attorneys be worded in certain ways if signed after October 1, 2011. The wording of the durable power of attorney is very relevant in doing any kind of asset protection planning. This is because if the words in the power of attorney document do not specifically authorize certain actions, then the caregiver will not be able to carry out those actions. Many attorneys or caregivers think that the durable power of attorney is a simple form document that can be obtained through form books or online forms, but that is not the case. This is because when an aging parent is incapacitated and the power of attorney actually needs to be used, all of the financial companies dealing with the power of attorney will require specific wording not usually found in generic forms.
It is very important to have a durable power of attorney document drafted by an elder law attorney because it is the elder law attorney who most commonly advises the adult children who are actually using them for their parents and facing roadblocks with third parties accepting a durable power of attorney documents. Since the elder law attorney actually implements what the document states, they are able to see where the wording of the durable power of attorney is insufficient. If the durable power of attorney is improperly worded or does not exist, then the only right of recourse for the caregiver to take control of the finances is through a court-supervised guardianship. The court-supervised guardianship is a remedy or tool of last resort due to the time, expense and complexity of the proceedings. It also can be quite humiliating for the elderly person. So, making sure that the durable power of attorney is done right with the assistance of an elder law attorney is highly important, as it relates to all future planning.
For more information on Things To Consider In Elder Care Planning, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
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