My Parents Need Their Estate Plan Reviewed
Perhaps the most overlooked issue we encounter is out-of-date Estate Plans. Many people think that once they have a plan, it will work forever. The reality is, their lives change and the laws change. Your parents may be experiencing new challenges such as declining health, recent loss of a spouse, or even just transitioning into retirement, yet they still have the same Estate Plan.
Your parents may not have reviewed their estate plan in years because they mistakenly thought that because they still want the same beneficiaries, live in the same house, and have roughly the same amount of money then they don’t need to update their plan. However, many laws have changed over the years. Here is a link to a partial summary of some of the significant law changes that affect a substantial number of people. The laws concerning taxes, gifting, healthcare, and assets have fluctuated consistently in the past decade. Whether it is a personal or legal change, we consistently find costly issues and administrative problems in old plans. Even if your parent's intent hasn’t changed, they still likely need to make some updates.
The most devastating planning error resulting from a lack of consistent reviews could result in your family being powerless to address the cost of Long-Term Care. Your parents may have last done their Estate Plan when they were in good health and did not think to discuss the impact that Long-Term Care expenses might have on their estate. Quite often, When we met with the family that is suddenly in a position of paying for Long-Term Care, we are forced to inform them that despite being able to preserve an estate we are incapable of implementing a new plan.
An Agent must have the authority to mitigate costs related to Long-Term Care before the family is in the position of dealing with it or the estate may be wiped out because of this oversight. Obviously, this can be a catastrophe.
This is the most significant oversight that we consistently come across, but there are many other things that could be overlooked. Review the table below to see other suggestions regarding documents and information you may need to assist your parents.
Not Updating a Plan When:
Not Having Your Assets Properly Aligned with the Estate Plan:
Not Providing Powers Regarding Nursing Home Planning:
Not Communicating Enough with Loved Ones About:
The attorneys at Hooper Law Office review Estate Plans constantly. We meet with the family for a complimentary review to discuss their objectives and how the current plan works (or falls short). By the end of that meeting, we are able to make recommendations regarding the plan. If there is a problem, it can usually be fixed. Do not wait until it is too late.
Estate Plans vary from individual to individual; however, there are basic documents every adult needs. At a minimum, your parents need to have:
- a Power of Attorney for Finances,
- a Healthcare Power of Attorney,
- a Living Will, and
- a HIPAA authorization.
This planning will appoint trusted individuals (usually children or loved ones) to handle financial and healthcare decisions, allow them to communicate with doctors and hospitals when necessary, and keep the family out of guardianship court.
If your parents are concerned about nursing home costs, the Power of Attorney for finances must have special provisions that allow the Agent to protect assets. Without these provisions, it can be nearly impossible to stretch out or preserve their money if they lose capacity.
In addition to these basic documents, your parents also need a comprehensive plan to direct their estate during incapacity and at death. Usually, this central point of control will be a Last Will and Testament or a Trust.
The choice between these options is a complex decision based on goals, circumstances, and people, which require careful consideration from an experienced Estate Planning Attorney. There is no single factor that determines what plan will be best. For this reason, Hooper Law Office provides complimentary initial consultations to discuss Estate Planning goals before making recommendations about how best to plan an estate.