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Do your parents need to update their estate plan?

Editor's Note: The following is part 4 of an online series for National Sandwich Generation Month, aimed at bringing support and awareness to those families sandwiched between raising their kids and caring for aging parents.

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Wills, Trusts, Powers of Attorney, and Living Wills Are Vital Tools for Caregivers.

As our parents get older and begin to lose their independence, many will turn to their adult children to help them navigate the complicated and costly world of long-term and end-of-life care. For adult children already caring for young kids of their own, this new role of “caregiver” can be in a difficult one to assume without the right legal documents in place. 

According to forbes.com, approximately 51% of seniors between the ages of 55-64 do not have a simple Will. While no numbers were released for how many people do not have advanced directives or have not updated their estate plan in the last 10 years, one can only assume it’s at least that much higher.

Outdated estate plans can lead to many complications, such as agents listed who are unable to fulfill their duties or laws that have changed that make the documents inadequate to handle their original task. Even more concerning, if the estate plan was created in a do-it-yourself manner, there’s a very good possibility that the documents are invalid, or at the very least not created with long-term care goals in mind.

Essentially, outdated documents can lead to your parents’ true wishes not being followed, and may also mean that the assets they leave behind as an inheritance may not go their intended recipients.

Talking to older or retired parents about their estate plan isn’t necessarily something we look forward to, but it is of utmost importance to take care of.  Simply put, not having the right documents in place can make caring for mom or dad significantly more difficult and expensive down the road.  From the start, here are a few questions that you will want to gather the answers to.

Is There Already a Plan in Place?

There are several things that you should know about your parents’ estate plan, the first of which is whether or not they actually have one.  If not, you’ll want to start the search for a qualified attorney to get the process started.  Not only will an elder lawyer help with wills and trusts, but they can also help fund retirement, assist with senior living options, and much more.

Who Is the Executor?

Once it’s been established that there is an estate plan on record, it will be helpful to know who has been named as the executor.  Because parents don’t always share this information in advance, it can come as a blow to those not chosen. 

Instead of waiting until feelings are already raw, knowing in advance gives everyone time to accept the decision, not to mention the parents have the opportunity to explain why they made the choice they did.

Any Surprises?

Speaking of explaining choices, your parents may have asked their lawyer to include things in the estate plan that aren’t immediately understood by the heirs.  For example, perhaps one sibling is given real estate and another is given cash.  By discussing the reasons behind these kinds of choices, the parent can make their reasoning apparent rather than leaving everyone to guess later.  This is an excellent way to avoid hurt feelings and familial drama later.

Where Is the Information?

If your parent became incapacitated, would you know where to find their healthcare directive?  If you needed to pay the mortgage or car payment, would you know where to send the money and how much?  Would you even know what accounts to access and would you have access to those accounts?  And, if your parent should pass away, would you know where the will was, how to access a safe deposit box, or what funeral home to call?

In order to do any of these things, you need to know where to find your parents’ legal documents.  A fireproof safe is a reasonable place to keep them if they’re in the home, just make sure that you (or the person designated by your parent) has the combination or key to the lock.  Insurance policies, deeds and titles, and similar documents can be organized into a binder to make them easier to work with when the time comes.  Mom or dad’s elder lawyer will be able to help in determining what needs to be included in this binder.

What If My Parents Do Not Have an Estate Plan?

If your parents do not have an estate plan, this is a project that you will want to prioritize immediately for your parents’ financial and legal protection and your piece of mind. There are five general documents that your attorney will likely help your family create as you work through the estate planning process. They are as follows:

1. Last Will & Testament

· A Will is a written and specifically executed document which directs how a person’s estate is to be administered and distributed after their death.

· This document allows a person (the Testator) to designate someone to manage his or her estate (the Executor) and name beneficiaries who will receive the probate estate.

· The Executor has no legal status (or the ability to act) before the Testator passes away, meaning it is not effective in cases of disability or incapacity.

· A Will does not effect how assets pass that do not go through probate, i.e. life insurance, jointly held accounts, and real estate held jointly with right of survivorship.

2. Revocable Living Trust

· A Revocable Living trust is a written agreement between a Grantor who contributes property and a Trustee who agrees to manage the property of the trust according to the instructions contained in the Trust Agreement.

· A trust is often used as a way to avoid probate expenses and delays, protect the family’s privacy, put “speed bumps” around the family’s inheritance and in some situations reduce federal estate taxes.

· A Revocable Living Trust ensures that a person can maintain complete control of his or her wealth while capable and that a person’s wishes are carried out during his or her incapacity and after death.

· When leaving wealth to minor children or grandchildren, a Trust can help ensure that an inheritance is not given to the children in one lump sum before they are mature enough to handle it.  A trust gives seniors more flexibility to protect their children’s (and grandchildren’s) future and their best interests. 

3. Power of Attorney

· A Power of Attorney allows an individual to name one or more persons (The Agent) that can act on their behalf regarding property, legal, financial and personal matters.

· An Agent can have broad or limited legal authority.

· There are three different types of Powers of Attorney: nondurable, durable and springing.

· If your parents’ Powers of Attorney are more than a year old, have them refreshed by an attorney so they are not considered out of date by financial institutions.

4. Living Will/ Healthcare Representative

· A Living Will expresses a person’s wishes concerning his or her health care including artificial life support systems, surgery, or other medical treatments related to end of life or permanent unconsciousness.

· A Living Will is only effective when it is determined that the individual is unable to understand or appreciate the nature and consequences of health care decisions, unable to reach and communicate an informed decision regarding treatment and a doctor certifies that the individual has a terminal condition or is in a permanent coma.

· Equally important is the appointment of a healthcare representative who is legally able to make healthcare decisions at any time the individual is unable to give their informed consent.

5. HIPAA Medical Release

· A HIPAA Medical Release gives authorization to release healthcare information under the Health Insurance Portability and Accountability Act.

· It allows an individual to authorize a representative or multiple representatives to have access to any health information regarding the individual’s care and treatment.

· In the absence of a signed HIPPA release, access to medical and insurance records may be restricted for family and other loved ones in an emergency.


Want to learn more about how you can best handle the needs of an aging parent while still raising your own family?

Download our FREE e-book, "The Sandwich Generation Guide."

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