Have your parents planned for their future? If you don’t know, the holidays may provide the perfect opportunity to ask.
The end-of-the-year holidays are often the only time the whole family is together in one place. If you’re concerned about your parents, consider these options for opening up a conversation.
First, remember to be sensitive. No one wants to admit that they are getting older or may be unable to care for themselves in the future. Also, your parents may still see themselves as your caregivers and may not appreciate a role reversal. Choose your words carefully and pick a setting and time that will make them feel comfortable and not embarrassed or under siege.
Second, do not let sensitivity get in the way of addressing the topic all together. Practice what you want to say beforehand with your spouse or siblings. Their feedback may help you see the topic from different viewpoints and your parents’ possible reactions and come up with the best way to express your concerns. With practice, you will feel more comfortable bringing up the subject with your parents.
Third, do your research. You may not have all the particulars on your parents’ specific financial and medical situation, but you can make an appointment with a trusted estate planning attorney who can give you ideas about what types of documents your parents may need.
Some basics to consider:
• First, do your parents have long-term-care insurance? More than 2 million Americans are expected to need assisted-living or nursing-home care this year, and that number is only expected to increase as the nation ages.
In Savannah, the cost of care at these facilities ranges from $48,600 for an assisted-living facility to $70,810 for a private room in a nursing home, according to the 2015 Genworth Cost of Care Study. These costs can easily wipe out a life’s savings if not planned for in advance. Medicare generally does not cover these costs. However, an estate-planning attorney may help you determine if your parents qualify for Medicaid or Veterans Aid and Attendance benefits.
• Next, do they have an advance directive for health care outlining their desires for life-prolonging measures, if any, and designating someone to make decisions on their behalf in case they are incapacitated? A recent article in the American Journal of Preventative Medicine states that only 26 percent of people have an advance directive. Likewise, do they have a durable power of attorney designating someone to make financial decisions for them? Understand that the court does not necessarily grant this power to next of kin.
• Do your parents have a will? A will allows your parents to outline how they would like their worldly goods divided after they pass, decreasing the chances of family disputes in a time of grief. A more sophisticated will can be written to minimize estate taxes and allocate assets in a more structured way.
• Finally, your parents may desire one or more trusts. A revocable living trust is like a will, but without the problems of probate, court costs or delays. Your parents also may want a specific trust set up for charity to finance their grandchildren’s education or for a child or grandchild with special needs.
An estate-planning attorney can help you learn more about the different options and address your parents’ specific situation. Having this conversation may be the most important thing you ever do for your parents and may help you have a happier new year.
Smith and Barid are co-founders of Savannah-based Smith Barid LLC, which specializes in estate planning, business planning and special needs planning.