Estate planning is not something anyone wants to think about. No one likes planning for events upon a loved one’s demise. Yet preparing is the key to preventing disaster down the road. Adult children of elderly persons should have estate planning discussions with their parents to ensure that their affairs are in order. Once the appropriate documents are in line, it is essential to periodically review the plan, as things may change. Doing this before a loved one is unable to make further decisions is crucial for everyone’s peace of mind. Experts recommend that adults review their estate plan every three years, regardless of their age or position in life. Adult children need to take the responsibility to talk to their parents about their estates and what must be done/changed in order to ensure current accuracy.
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The living trust
Living trusts enable people to dedicate specific assets to specific family members upon the parents’ deaths. The assets are instantly distributed to these beneficiaries at that time, but they remain the parents’ to use during their lifetimes. A living trust does not go into probate and does not require a waiting period for the asset dispersal. Because things can change in a person’s lifetime, including who people might want to oversee the distribution of their assets, as well as the age at which each person receives the assets designated for them, periodic reviews are necessary.
Estate plan: Changing the person who makes decisions
If parents made their estate plan when they were young and their adult children were small, chances are their desire regarding who makes the decisions for them when they become incapable of doing so has changed. The Power of Attorney and advance directive-designated people may have changed. The Power of Attorney goes to the person who will handle all business and personal finance issues for the elders when they are unable to do so. The advance directive is the document that appoints a person to handle health and medical treatment decisions when the elders are not able to do so for themselves. If the person handling someone’s medical affairs alters, but the advance directive doesn’t, it can cause serious issues and discomfort.
Learning where important documents are
There are certain important documents to find that are necessary upon the death of a parent. Not knowing where such documents are can add a lot of stress to the situation of losing a parent. Adult children should talk to their parents while they are of sound mind regarding where the following documents are. This is essential. They should do this every few years, especially if the elderly person is in a new residence:
- Personal identifying records (birth certificates, Social Security cards, military records)
- Medical information (any information pertaining to the health of the person, including necessary medications)
- Estate documents (wills, living trusts, power of attorney, and any other important documents that pertain to the person’s estate)
- Income documents (tax returns, employment information, and current debts)
Access to the above documents can cut down the time spent searching for them. This will reduce the amount of time it takes to get the estate in order.
Taking care of things early
There is no way to predict what may happen in a person’s life. According to the Alzheimer’s Association, 5.4 million people suffer from Alzheimer’s Disease. This means many people in the older generations are at risk. If an estate is not sorted out before this disease or any other memory/brain-altering disease settles in, it can be detrimental to the distribution of the person’s assets and belongings. Taking the time now to not only create the estate plan, but to review it frequently is essential to a positive outcome.
The largest mistake people make is not updating their estate plans. Instances of the original executors passing away or retiring are common. A mistake like this is avoided by reviewing a person’s estate plan every few years. This allows for easy adjustments of the plan. Those who do so will be glad they took the time to do so. Not one wants to deal with extra stress and discomfort during a time of mourning.
Alzheimer’s Association. 2016 Alzheimer’s Disease Facts and Figures. Available at http://www.alz.org/facts/. Retrieved on July 18, 2016.
Filisko, G. M. (March 2011). 4 Costly Estate-Planning Blunders. Money. Estate Planning. AARP. Available at http://www.aarp.org/money/estate-planning/info-01-2011/4_costly_estate_planning_blunders.html. Retrieved on July 18, 2016.
National Institute on Aging. Getting your Affairs in Order. AgePage. Health and Aging. National Institutes of Health. Available at https://www.nia.nih.gov/health/publication/getting-your-affairs-order. Retrieved on July 18, 2016.