Knowing Their Wishes
If there's one thing that's more difficult to discuss than money, it's mortality. Talking to your parents about the possibility that they could become ill or incapacitated and acknowledging their eventual death will not be easy. It might seem tempting to assume that they have everything covered, but it will be better for all of you to have the conversation now rather than wait for a crisis to happen. That way you'll know what they want—and what they want you to do.
Your parents' estate plan should outline how and to whom they want their assets distributed. But making financial wishes clear is only part of pre-planning at this time of life. A will or trust only goes into effect at death. It doesn't make any provisions for someone who is no longer able to make decisions for themselves. There are a number of important questions to ask and things to do to make certain your parents are protected and will be happy with any care they may need.
Do they have the necessary powers of attorney?
A power of attorney gives an appointed person the right to conduct broad financial and legal affairs on someone else's behalf. There are two important powers of attorney that should be a part of every estate plan:
- Durable power of attorney for finances—This authorizes the person appointed to pay bills, manage investments, collect government benefits, file taxes and conduct other financial transactions.
- Durable power of attorney for health care—This allows the person appointed to make decisions if someone is unable to communicate with doctors.
- Living will—This is a document that states a person's wishes about receiving life-sustaining medical treatment if they become terminally ill. Also known as a "directive to physicians," it's frequently incorporated into a durable power of attorney for health care.
our two cents
What if they need special care or alternate living arrangements?
While everyone wants to remain independent, that's not always possible. It’s a good idea to discuss care options with your parents ahead of time. These can include:
- Adult day care—Centers and their offerings vary. Some provide meals, activities and certain health-related services; some provide intensive health and therapeutic services; and some specialize in Alzheimer's and related dementia.
- Assisted living—This can range from an apartment with meals and limited medical facilities to full-time health care facilities.
- Nursing homes—These offer 24-hour care to people who don't need to be in a hospital but can't care for themselves.
How will you cover the cost if they need some form of elder care?
The cost of elder care varies by facility, but any form of care can be a significant financial burden. If your parents don't have long-term care insurance (LTCI) (and even if they do), it's wise to address these potential costs before you're faced with paying them. Things to consider:
- What is and isn't covered by Medicare or other insurance?
- Have your parents set aside specific assets to cover these costs?
- Would they consider selling their home to pay for alternate living arrangements?