For many people, aging can sneak up and take them by surprise, and, sometimes, this can make it difficult to plan properly for the problems that can and will arise in the future due to age. Many seniors think they have a plan, but it might not be as complete as necessary. Not planning well for the estate of an elderly loved one could cause problems down the line for family members and friends who will need to decide how to handle things in their end days. It is possible to avoid some of the more common mistakes made during the estate planning process.
In This Guide
- Why Estate Planning?
- Not Having a Power of Attorney or Healthcare Directive
- Choosing the Wrong Executor
- Not Pre-Planning Funeral Arrangements
- No Last Will and Testament
- Not Discussing Estate Planning Details with Family
Why Estate Planning?
When caring for an elderly loved one, a family member or close friend will have to think about a lot of complicated things for the future. Estate planning is the best way to ensure proper preparation for when the inevitable happens to a senior. Many people assume that estate planning is about preparing for death when, in reality, it is instructions for how to deal with prolonged illness and providing for those left behind after death.
A good plan will:
• Ensure protection of assets after a move to a care facility
• Avoid the courts taking possession of the estate
• Help save estate taxes
• Designate appropriate people to take care of legal paperwork when illness or disability make the person incapable
• Appoint a person or people to make medical decisions
1) Not Having a Power of Attorney or Healthcare Directive
When a parent or elderly loved one gets sick, it can be stressful for the adult children and other loved ones who are taking care of them. If there is hospitalization, it can cause even more stress especially if the person becomes incapacitated and incapable of voicing their wishes. This can cause conflict amongst family members when there are disagreements on how to handle paperwork and medical decisions, and it can be costly when family members have to go to court for a decision. The best way to avoid these unnecessary rivalries and expenses is to appoint a power of attorney and have a healthcare directive in the plan.
• A power of attorney allows a senior to designate a trusted loved one or friend to stand in proxy for financial or legal decisions. This benefits family members as it allows access to the checking account and other finances to pay bills, move money, or take other actions when necessary for an incapacitated or hospitalized loved one.
• A healthcare directive can include a power of attorney for healthcare or healthcare proxy, medical wishes and instructions, and a living will. Both a power of attorney for healthcare and a healthcare proxy are people that are chosen to make healthcare decisions for an elderly patient that is incapacitated. A living will includes medical instructions for end-of-life care and answer questions about things like pain medications, life sustaining treatments, and do-not-resuscitate orders.
2) Choosing the Wrong Executor
Executors are appointed when creating the Last Will and Testament of an elderly person. Their job is to be sure that their assets are distributed according to the way they are instructed in the will. Tensions can arise when siblings think that the wrong person was chosen for this duty. Perhaps they feel jealous of their sibling or feel that the one that was appointed is abusing power and not doing their job right.
This can be avoided if the parent adds in a clause to the will that any decisions need to have a majority or unanimous vote as this will keep the appointed executor from abusing their power. Also, a third party executor can be appointed. A third party person can be anyone who does not have a vested interest in the estate. By doing this, a parent can alleviate the tension of the siblings.
3) Not Pre-Planning Funeral Arrangements
Planning a funeral can be a daunting task for family members after the death of an elderly loved one. If it is not done before one dies, it can leave a lot of questions unanswered about their desires. When the funeral is pre-planned it can make it simple for the family members and beloved friends to be able to know exactly how to prepare for it. Some of the questions to think about are:
• What kind of service: Elaborate or simple?
• What kind of music?
• Should there be prayers?
• What kind of burial: Cremation or casket?
4) No Last Will and Testament
Most people don’t like to think about their own death and what will happen to their things afterwards. However, without legal documentation, it can be up to the living children to be able to decide who gets what. This can cause chaos and arguments amongst siblings when they want the same thing or can’t decide how to divide up possessions equally. It can cause large rifts in families and lead to dissolving relationship in the family.
This chaos can be avoided by making a Last Will and Testament. This will designate an executor and tell what property or asset each person gets. A will is not hard to create, but most people don’t feel comfortable doing it themselves. It might be helpful to hire an estate planning lawyer to draw up this paperwork especially if there are complicated assets involved.
5) Not Discussing Estate Planning Details with Family
Many elderly parents aren’t comfortable discussing estate planning with their family members. It can be uncomfortable to talk about money or talk about when they aren’t there. However, it can be detrimental to the family so that they understand the reasoning behind some decisions. This can be avoided by doing a few simple things like:
• Letting family members know where the will is located
• Discussing end-of-life wishes
• Allowing family members to choose what they would like