For My Parents

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Perhaps the most overlooked issue we encounter is out-of-date Estate Plans.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. 

Related Article: When Should Estate Plans Be Updated?

The Impact of Estate Planning on Future Long Term Care Options

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.

Common Estate Planning Mistakes and Oversights

Not Updating a Plan When:

  • Your spouse, agent or beneficiary dies;
  • when your health or finances change
  • when the laws change
  • when your beneficiaries’ circumstances have changed: older, health or finances have changed, married/divorced, had children, or moved

Not Having Your Assets Properly Aligned with the Estate Plan:

  • Never changing ownership, beneficiary designations, title, payable on death designations, transfer on death designations, or deeds to insure the plan controls the property
  • Not updating ownership on accounts as you change your investments or make purchasest
  • Listening to bankers or investment advisors who do not know how your estate plan works

Not Providing Powers Regarding Nursing Home Planning:

  • Not giving the power because you’re not currently concerned that you will go to a nursing home
  • Not discussing the impact of nursing home costs on your estate with your planner
  • Thinking long term care insurance makes the powers unimportant

Not Communicating Enough with Loved Ones About:

  • Who is “on-deck” to act if something happens
  • Your healthcare wishes
  • How your plan works
  • What you own and how they get information about your assets

Related Article: Common Errors When Helping Aging Parents with Finances

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.

Schedule Your Complimentary Estate Plan Review Session

What Estate Planning Documents Do My Parents Need?

Estate Plans vary from individual to individual; however, there are basic documents every adult needs. At a minimum, your parents need to have:

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.

Schedule Your Complimentary Estate Plan Review Session