Unfortunately, difficult conversations about finances, relationships, and our inevitable death are simply a part of life. However, having these somewhat troubling discussions in times of good health and happiness usually make them infinitely easier. The same goes for creating a plan to take control of an elderly relative’s finances.
With all the incredible advancements of modern technology and healthcare, in general people are living much longer lives. As parents continue to age, their children are facing the fact that they may need to step in and help with paying bills, making investments, or even arranging for long-term care services.
It’s important to remember that for a senior citizen, planning for the future involves so much more than simply dealing with finances. It’s also vital to take the time to understand your relative’s priorities when it comes to lifestyle, independence, and emergency care options in the event that their health fails. It may seem morbid, but clarifying all of these details ahead of time will prevent as much conflict and stress possible for everyone. In many cases, you may also be able to virtually eliminate the need to concern yourself with issues like guardianship proceedings or incompetency declarations.
The best and most important item to begin with is setting up a HIPAA authorization form and a Health Care Power of Attorney. The HIPAA form gives the designee permission to access important medical information, but does not grant decision making power. However, a Health Care Power of Attorney allows someone to make critical medical decisions on your loved one’s behalf in the event that they are unable to make those decisions themselves.
Next, it’s vital to begin the asset protection planning process by creating a comprehensive estate plan. An estate plan should also designate a Property Power of Attorney, which grants the chosen person the legal authority to act on your relative’s behalf when deciding what to do with homes, businesses, and other assets.
After these basic steps are taken care of, it’s a good idea to try to automate as many financial transactions as possible. Set up direct deposits and automated payments for utilities, rent, and other expenses. Compile and securely store any important documents like benefit plans, bank accounts, and insurance policies. Also, make sure to double check that there are no supplemental benefit plans or long-term care insurance that may have been forgotten.
Finally, your loved one may even qualify for several federal and state benefit programs. Explore the variety of options on benefitscheckup.org and eldercare.gov for discounts on taxes and utility bills, as well as information on local health care and social services providers.
As an estate planning lawyer that specializes in elder law, I can tell you although these conversations can be difficult, initiating them as soon as possible is always the best course of action. The plans you create will help your relative live a life that runs smoothly and is free of worry, and as time passes you will both be more confident and prepared to face any difficult situations that may arise.