I was recently speaking with a younger couple following one of our educational events in Brentwood and we spent most of the time discussing their parents. This couple told me that both of their parents were still living, but their parents are in their mid 80s and they have concerns for their wellbeing. This couple continued to discuss that they have concerns for their parents health living alone, are they able to make health care and financial decisions on their behalf should something happen, and when is it appropriate to discuss moving their parents into an assisted living facility?
After hearing this couple’s concerns, I addressed three items for them to consider when it comes to caring for their elderly parents:
- Discuss With Your Parents Having Their Disability Legal Documents Completed
I explained to this couple that the most important item that they can discuss with their parents is making sure their parents have their disability legal documents signed and put in place. I explained that these documents include their financial power of attorney, their health care power of attorney, and living will declaration. The financial power of attorney and health care power of attorney ensure that should their parents be unable to make their health care and financial decisions, this document names a trusted family member to make these decisions, access medical records, and speak with doctors when they are no longer able to make these decisions. In addition, I explained that should there be no disability legal documents in place, then you would be left with no other alternative but to sue your parents to have them declared incompetent so that a judge could name you to be a guardian over them in order to make these decisions when your parents are no longer capable to do so.
- Make Sure Your Parents Have Their Last Will and Testament Completed
I discussed with this couple that everyone, regardless of their wealth, needs a last will and testament, commonly referred to as a will. I explained that without a will in place, the State of Tennessee has written a will for their parents, and their assets will pass according to Tennessee law. In addition, the process of going through the probate court process is a hassle enough, however, going through the probate process when no will is involved has additional steps and can be even more of a headache.
- Go See an Estate Planning Lawyer Today to Discuss if Your Parents are at Risk for Nursing Home Poverty
However, the most important item that I discussed with this couple is that they need to go speak with an experienced estate planning law firm to discuss if their parents are at risk for nursing home poverty. I explained to this couple that if their parents go into a nursing home, Medicaid will review all the assets that they own. Medicaid allows you to own a home, a vehicle, a prepaid funeral, and no more than $2,000 in other assets in your name. If you have less than this amount, you will qualify for Medicaid and Medicaid will pay for your parents’ nursing home expenses. However, if you have over this amount in assets in your name, then your parents will be forced to spend their own assets until they have no more than $2,000 in other assets in their name. I explained to this couple that I have worked with many families that spent through $200,000 to $300,000 in savings in just a few years in the nursing home. In addition, I discussed with this couple that after your parents die, the State of Tennessee will also exercise their estate recovery rights by forcing the sale of your parents home so that Tennessee can be reimbursed for all the costs that they paid out while your parents were accepting Medicaid benefits. However, I explained that an experienced estate planning law firm could help your parents protect their assets from nursing home expenses through an irrevocable Medicaid trust.