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It’s Time to Talk Estate Planning with Your Parents 

We’re all familiar with Millennials’ stereotype as self-absorbed, spoiled children who can’t seem to get their lives in order. But the truth is, Millennials have matured into responsible adults and productive citizens, with many approaching their (gasp!) forties. Consequently, their Baby Boomer parents are aging, too, requiring their Millennial children to engage them in a challenging conversation on a sensitive topic: estate planning.

What’s Involved in Estate Planning?

Are you a millennial? Talk to your parents about estate planning. If the thought of talking to your parents about estate planning sounds about as much fun as going to the dentist for a root canal procedure, let us put your mind at ease. First, understand that estate planning encompasses much more than just wills and inheritance, though we know why that’s the first thing that comes to mind for most people. Yet an estate plan can also designate the person assigned to make healthcare decisions, should your parent(s) become incapacitated and no longer capable of making these decisions themselves. With a detailed estate plan, there is no guesswork: if an emergency occurs with your parent(s), you and your siblings can provide emotional support and assist with their care, rather than deal with the stress of having to make life-or-death choices. What happens in an emergency when no estate plan exists? You, as the child, could face agonizing uncertainty about your parents’ desires, raising the possibility of the courts stepping in and deciding for you (and them). Isn’t it better to broach the topic while your viable, healthy parents can tell you precisely what they want via an estate plan?

Necessary Documents and Information for Estate Planning

While wills are essential for settling an estate after a loved one dies, your parents (and you) should get the following paperwork in order while alive and healthy:

  • Power of Attorney – names a trusted individual to make legal decisions for your parent(s) if they cannot express their wishes themselves.
  • Health Care Directive – names a trusted individual to make healthcare treatment decisions for your parent(s) if they cannot give those directives themselves.
  • Living Will – indicates whether your parent(s) should be kept alive by artificial means if they cannot verbalize their wishes.
  • Do Not Resuscitate (DNR) Order – directs healthcare providers not to revive your parent(s) should their heartbeat and respiration cease. Their physician prepares this document following a consultation in which they discuss the matter.
  • A Medical Order Life-Sustaining Treatment (MOLST) – specifies to healthcare providers the kinds of life-sustaining treatments they should or should not administer if your parent(s) cannot tell them. A few examples include, “I do not want to be intubated,” or “I do not want a blood transfusion.” They can list multiple life-sustaining treatments on their MOLST, so be sure to discuss all possibilities.

Power of Attorney, Health Care Directive, and a Living Will can ease the burden of a loved one’s illness by designating a person to handle necessary transactions like paying bills, in addition to making medical decisions. We cannot emphasize enough how crucial it is to put this paperwork in place before there’s an issue – particularly if dementia or Alzheimer’s are part of the family medical history.

Once the paperwork is signed and completed, your next step is to ensure that you know where your parents keep their estate plan. It’s a good idea to ask them to document passwords to vital accounts on one primary document and set up bills on autopay, especially if they entrust that information to just one person. Research some digital options for secure data storing, where you can save data like passwords, the process for household bill paying, and financial and legal documentation.

How To Initiate a Conversation About The Sensitive Topic of Estate Planning

Now that you have a general understanding of everything involved in estate planning, it’s time to talk to your parents about it. Keep in mind, as challenging as it is to discuss this topic with a loved one, it pales in comparison to a gut-wrenching scenario of a dire medical emergency with one of your parents, with no clear-cut directive as to how to proceed. Assure your parents that estate planning will alleviate your anxiety and free you up to offer your emotional support in a time of crisis. Framing the subject in this manner will persuade your parents to engage on the issue and take care of the necessary paperwork.

One tactic you might take is to ask them for their advice as a prelude to the conversation. You could say, for example, “Now that Jack and I are married, we want to create our estate plans. How did you two decide who to designate as the power of attorney and health care proxy?” If they respond that they do not have an estate plan, you’ll know where to begin.

Or, you can take the direct approach. Suppose your family has a history of dementia. You could express your concerns about it and your desire to prepare all the legal documents now before anything happens. That way, you can focus on getting them the best care possible instead of agonizing over the legal and financial paperwork. Stress that an estate plan puts them in control because they get to define their wishes and have them upheld, versus you having to guess – or, in a worst-case scenario, the government, via the courts, appointing a stranger to make these vital decisions on their behalf.

My Parents Have Agreed to An Estate Plan: Now What?

Estate planning is a legal specialization. As such, it demands complex skills only an estate planning attorney can offer. That’s why you must hire an attorney who focuses on estate planning, not one who occasionally writes a will for a client. As we mentioned above, a comprehensive estate plan includes a Power of Attorney, Health Care Directive, Living Will, DNR Order, and a MOLST.

Contact California Probate and Trust, PC for Your Estate Planning Needs

If you’re one of 43 million Americans caring for an aging relative, you know firsthand the physical and emotional pressures that accompany being the sole chauffer, cook, and physical therapist for an ailing person. A caretaker’s life can often revolve around medical appointments and medicine dosages. But what about the caretaker? Who takes care of them? And how does caretaking affect their health?

Currently, medical literature on caretakers shows an interesting divide. On one hand, there are suggestions that caretaking can affect health significantly. For example, a 1999 study in the Journal of the American Medical Association found that caring for an elderly individual was so “burdensome” to family members that it contributed to an early death. The study concluded that the physical demands of care giving made many caregivers physically vulnerable to health problems. In simple language, people who gave care were often more at risk for death than those that did not provide regular care to a loved one.

However, a more recent study of caregivers by a Boston University epidemiologist, found that while caregivers were more stressed than non-caregivers, their mortality rates were still lower than those of non-care givers. The researchers in this study theorize that caregivers are more physically active than non-caregivers and reap the physical benefits of that activity.

Although researchers continue to study caregivers and debate its risks and benefits, there’s no doubt that caregivers themselves face a number of stresses associated with their care giving duties. More and more organizations have started to offer care giving services to help ease the burden for caregivers. For example, if you’re an AARP member, you can get access to resources for families with aging relatives including a care plan with a registered nurse. If you’re a caregiver, you should also check out the New York Times list of resources for caregivers. Remember, the more you take care of yourself, the better equipped you are for providing care to others.

Bankruptcy for Mature Adults

It’s called your “golden years” but for many seniors and baby boomers, there is no gold and retirement savings are too often insufficient to maintain even basic living standards of retirees. In fact, a recent study by the University of Michigan found that baby boomers are the fastest growing age group filing for bankruptcy. And even for those who have not yet filed for bankruptcy, a lack of retirement savings greatly troubles many who face their final years with fear and uncertainty.

Another study, conducted by Financial Engines revealed that nearly half of all baby boomers fear they will be in the poor house after retirement. Adding insult to injury, this anxiety also discourages many from taking the necessary steps to establish and implement a clear, workable estate plan. So instead, they find themselves with mounting credit card debt, and a shortfall when it comes time to pay the bills.

In fact, one in every four baby boomers have depleted their savings during the recession and nearly half face the prospect of running out of money after they retire. With the depletion of their savings, many seniors are resorting to the use of credit cards to maintain their standard of living. This is further exacerbated by skyrocketing medical costs, and the desire to lend a helping hand to adult children, many of whom are also under financial distress. These circumstances have led to a dramatic increase in the number of senior citizens finding themselves in financial trouble and turning to the bankruptcy courts for relief.

In 2010, seven percent of all bankruptcy filers were over the age of 65. That’s up from just two percent a decade ago. For the 55-and-up age bracket, that number balloons to 22 percent of all bankruptcy filings nationwide.

Whether filing for bankruptcy relief under a Chapter 7 liquidation, or a Chapter 13 reorganization, senior citizens face their own hurdles. Unlike many younger filers, senior citizens tend to have more equity in their homes, and less opportunity to increase their incomes. The lack of well-paying job prospects severely limits older Americans’ ability to re-establish themselves financially following a bankruptcy, especially since their income sources are typically fixed while their expenses continue to increase.

Many senior citizens are hesitant to think about the possibility of requiring long-term health care. While this reluctance is natural, it is vital to know the facts: hundreds of thousands of elderly Californians currently reside in long-term nursing facilities. Many of these people are paying for their custodial healthcare out of pocket. Unfortunately, by the time Medi-Cal steps in, they will be impoverished.

To avoid such a scenario, you must be aware that Medicare doesn’t cover long-term care and make proper arrangements in time. Our estate planning attorneys at California Probate and Trust, PC recommend that seniors and their families take five simple steps when Medicare runs out.

1. File a Medicare Appeal

Once Medicare decides to end healthcare coverage for your parent, you will receive an official discharge notice—a NOMNC or Notice of Medicare Non-Coverage. The health care facility administration must deliver this notice no less than two calendar days before Medicare ends your parent’s coverage.

Once you receive the NOMNC, you have the right to a quick appeal. Make sure to include any reasons you believe Medicare should extend your parent’s coverage, such as your conviction (with the support of relevant medical documentation) that their health will deteriorate without continued care.

However, keep in mind that even if you manage to extend Medicare, the program limits days of care per beneficiary. If your parent needs long-term care, you will need to plan accordingly.

2. Take Care of Relevant Legal Documents

At this point, make sure you have:

  1. Your parent’s Advance Medical Directive, and;
  2. A Durable Power of Attorney document that allows you to make crucial medical, financial, and legal decisions for your parent in case they cannot do so themselves.
  3. A Revocable Living Trust. If your parent is in a skilled nursing facility, it’s time to talk about a changing of the guard, and appointing a new trustee to oversee and preserve your parent’s money.

If your parent hasn’t signed a POA yet, now is the time. If your parent loses their mental capacity due to dementia, stroke, or another medical condition, and you don’t have a legally valid POA in place, you will have no choice but to file for guardianship with all the ensuing legal costs and hassle.

Likewise, ensure your parent’s trust, will, estate planning documentation, prenuptial and postnuptial agreements, and any other essential documents are valid and up to date.

3. Prepare to Apply for Medi-Cal

For most people, paying for long-term health care out of pocket is not an option. Unless your parent has private insurance, Medi-Cal is probably the most realistic possibility of covering nursing home costs.

To help a parent apply for Medi-Cal, you will need to gather records of all their income and assets, including:

  • Gross income documentation
  • Insurance policies
  • Checking and savings accounts
  • IRAs, CDs, and annuities
  • Mortgage documentation or rent contract

Medi-Cal has ways of confirming income and asset statements, and an inaccurate application may result in denied benefits, so provide complete, up-to-date information. Remember to include all other necessary documentation such as your parent’s social security card, driver’s license, and marriage license.

4. Learn About Medi-Cal Requirements and Asset Protection Strategies

To be eligible for Medi-Cal, California’s Medi-Cal program for long term care (skilled nursing facility or the PACE program). Medi-Cal has complex rules regarding income and assets. However, do not fear. In most cases, with proactive planning, it is legal and possible to preserve most or all of the money, investments, and real estate. In some cases, a married couple can also preserve all of the monthly income.

If you call the Medi-Cal office, the Medi-Cal worker is only trained to tell you to spend all of your money and to deny your claim. We know better, and can save nearly everything. We can even avoid the look-back period. Don’t go broke when Medicare runs out. Let us help you save everything.

We recommend preparing for a Medi-Cal application well in advance so your family can preserve their assets; all of their assets. It’s your choice. You can keep your money in the family or you can give it to the government.

5. Consult an Elder Law and Estate Planning Attorney

Even if your parent hasn’t planned for Medi-Cal and needs immediate help with health care coverage, a knowledgeable asset protection lawyer can suggest several effective legal strategies, such as:

  • Asset protection trusts
  • Caregiver agreements
  • Spousal Support Order

An estate planning attorney can help you comply with current Medi-Cal requirements, especially as California prepares to implement changes to the Medi-Cal asset test.

California Probate and Trust, PC: Estate Planning and Elder Law Firm in Fair Oaks, CA

At California Probate and Trust, PC, we help families & professionals in California plan for long-term care while protecting their assets.

Many of our clients worry that they will have to go broke paying for nursing home care and lose all their hard-earned money. Please know that an estate planning attorney can suggest effective legal methods to protect your assets from Medi-Cal claims.

Our free guide, The 7 Reasons Why You Need an Estate Plan, answers many of the common questions about end-of-life planning. Call 916-603-2782, leave your name, mailing address, and phone number, and the guide will be on its way to you shortly.

Click to listen as R. Dustin MacFarlane explains the Durable Power of Attorney and What to Look for in an Estate Planning Attorney on his podcast, Legally Speaking.

Have any questions or concerns? A trust lawyer with California Probate and Trust, PC would be happy to assist. Call (916)-674-2066 or fill out our contact form today for a free consultation.