If you were born in the “baby boomer generation” or younger, chances are you have children and parents who are alive. This really means that you have present or future responsibilities to both of them. When most people think about estate planning, they think of providing for their children. However, if your parents are still alive, you may want to think of also providing for your parents to help them in the twilight of life.
The Key Takeaways on Providing for Your Parents
- If your parents are dependent on you for support of any kind, how would your premature passing affect them? Your answer will begin to help you determine the solution.
- Part of that solution may involve creating plans for their care within your estate planning strategy.
You Are Not Alone
The demographics in the country are well known: there has never been a larger and older group of senior citizens, ever. Between longer-than-expected life expectancies, various health issues, and expensive healthcare costs, many seniors are outliving their retirement savings. About 1/4 of American families are currently having to address this issue, and about 45 million are providing for family or friends. This is surely something that needs some planning!
The vast majority of seniors older than 65 will need some form of long-term care, either at home or some form of assisted living or nursing home. Unfortunately, Medicare does not cover these costs and many doctors or refusing to take on new Medicare patients. These dynamics combine to limit access to healthcare of raise the amount of medical bills.
Actions to Consider
- Create a trust in your estate plan for your parents. You can even include language that would allow your parents to receive Medicaid.
- Choose someone to take care of your parents’ physical needs. You should choose someone who lives locally and near your parents and can handle the many responsibilities involved.
- Choose a trustee to manage your trust property. You may select the same person to be trustee as you chose to provide for the physical care of your parents, if you believe that is the best situation. Another option would be to choose a professional trustee.
- You can buy a life insurance policy that would provide any needed funds to take care of your parents’ needs and not use your own assets. You may want to get a term life policy that extends past your parents’ life expectancy – this is the cheapest option.
- You may also want to assemble a team of experts who can provide comprehensive advice and expertise after you pass. Some of these professionals may include:
- An elder law attorney experienced with government benefits, financial advisor, CPA, and an insurance agent.
- Medical advisors who have specialties linked to your parents’ needs.
- A care manager specializing in geriatrics, visiting nurses, and non-medical home care services.