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Tuesday, February 05, 2008
Carrie Schwab Pomerantz :: Townhall.com Columnist
Helping Aging Parents Plan Ahead
by Carrie Schwab Pomerantz
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- A trust. There are different types of trusts to choose from depending on your individual needs and desires. A key advantage of a trust is that it spares your beneficiaries the time and expense of probate, and it can provide tax benefits.

- Durable power of attorney for finances. This gives the person you appoint the right to conduct broad financial and legal affairs on your behalf.

- Durable power of attorney for health care. This allows your spouse or other trusted family member or friend to make medical decisions for you, including decisions about life-prolonging care.

If your parents don't have these essential estate-planning tools in place, help them find an attorney they trust who will work with them to make sure they're protected. Assure them that taking the time now to craft an estate plan that reflects their wishes means they can safeguard their estate from unnecessary taxes and fees, while at the same time ensure their fruit of life's work winds up where they'd like it to be.

THE PRACTICAL ISSUES

If your parents do have a well-thought-out estate plan, you can help them with a few practical issues to guarantee it's up-to-date and accessible.

1. Verify that their will or trust is current, especially if there have been any changes in family circumstance such as marriage, divorce or the birth of a grandchild.

2. Update named beneficiaries on all government entitlements (such as Social Security, retirement accounts, disability and life insurance policies, bank accounts and annuities.) You don't want assets inadvertently going to an ex-spouse. It's also a good idea to name secondary beneficiaries.

3. Make sure a trusted and competent family member or friend knows where important documents and records are kept and has access to them.

THE PERSONAL REWARDS

As hard as it might be to start this conversation, I think you'll find it mutually rewarding since you're not just talking about money. You're discussing human issues: family harmony, mutual respect and responsibility. In fact, I believe that taking the time to talk to elderly parents about their finances can be the greatest gift. And it gives you the valuable opportunity of helping take care of the people who first took care of you.
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About The Author

Carrie Schwab Pomerantz is a Motley Fool contributor.

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(6 comments so Far)
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Reply # 1
Date: Apr 11, 2008 - 11:47 PM EST
A Sensitive Issue
With my mom talking to her about relinquishing control was a sensitive issue, and not one that was easy to discuss with a senior who relished her independence.

But you are absolutely right, the living trust, the directives, these are all really important things that you need to get signed before your aging parent is incapacitated and you are no longer able to get them signed, My mom resisted until dementia started to set in, then, with constant prodding from my sister, she relented and we got the documents signed. Thank goodness the notary didn't ask her too many questions.

I've posted a few of these documents for helping your aging parent that you can download for free on http://www.boomer-books.com. Hopefully they'll be of help to someone.

-- Bill Grote
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Reply # 2
Date: Feb 5, 2008 - 7:18 PM EST
Willingness to discuss...
I have been balancing on two situations: the first one is my Aunt- she decided that selling her house was best and knew what needed to be done. She complied with everything that needed to be done- wills, paperwork, everything. She also decided to put everything in my name to make all transactions easier and cleaner. We rented a senior apartment and everything went perfectly. She was willing (which is the key).

On the other side of the coin, if you read my other post, my mother is a financial disaster and is unwilling to budge or think about her twilight years. I paid her taxes on the house, the deductible on 2 car accidents, a power bill that was 6 months delinquent and a water bill that was 3 months late. She refuses to get a job (she is not too old to work). Last year my brother and I both paid $3000 each to keep her afloat- she is a prickly character and I have paid the money to keep her from living with me.

The author is absolutely correct in handling these things early- if you can get your senior to agree.
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