Compliments of the McGee Law Firm, Attorney Brandon McGee
It is the call we all know will come one day. One or both of our parents have fallen seriously ill. Of course, our first reaction is concern. But, after the shocking moment has passed, we wonder “what do I do now?”
If your parents have done effective legacy wealth planning, they would have some or all of seven elements that would ease your path.
First, a Health Care Power of Attorney (sometimes referred to as a Health Care Directive, Living Will, or Health Care Proxy) will designate a person to make health care decisions for them when they are unable to make decisions for themselves.
Second, but related, is a “HIPAA” Power. The Health Insurance Portability and Accountability Act has restricted access to health care information so loved ones may be denied necessary information such as whether the person is even in the facility. This HIPAA power allows the designated family members to cut through this information barrier.
Third, a General Durable Power of Attorney appoints an agent to act for your parents upon incapacity. This power of attorney deals with financial and property matters.
Fourth, a Revocable Living Trust enables your parents to move title of assets into the trust, thereby avoiding the potentially cumbersome probate process. During incapacity, the successor trustee (such as you) can step in seamlessly and manage the assets. With a Trust, probate is avoided and the administration fees at death can be up to fifty percent less than what they would be if the assets were subject to probate.
Fifth, a Pour Over Will takes anything that was overlooked and places it in the trust at death. While the assets which had been overlooked may be subject to probate, they will be moved into the trust in a coordinated plan.
Sixth, your parents can choose to set up a Funeral Trust to pay for their funeral services and cremation or interment. With a Funeral Trust, assets are set aside safe from creditors and the Medicaid authority so they will be there at death and the burden of paying for the funeral will not fall on you or your siblings. With a Funeral Trust, your parents need not choose a funeral home now, which can be important given they may move later in life to be closer to family, health facilities, or warm weather.
Seventh, the most frequent fights upon the passing of a parent are not about the money, but about non-financial assets, such as your grandmother’s quilt or wedding ring. A holistic legacy plan can pass on your parents’ hopes, values, life stories, and family heirlooms.
While the final illness and passing of a parent is always difficult, these seven estate planning elements can smooth their passing. Further, this smooth transition can avoid unnecessary strain on your family when it is already emotionally vulnerable. A qualified estate planning attorney can help you or your parents set up an effective plan.
Written By: The American Academy of Estate Planning Attorneys