When I meet with new clients, the first appointment is often with the children of aging parents. Commonly, they come to us just before or during a crisis, such as a parent’s hospital or nursing home stay. Just as often they have little or no financial information about their parent(s) and cannot provide much of the information we need to assist them with asset protection planning.
Communication between a parent(s) and child(ren) before a crisis really does matter to safeguard a lifetime of savings and income. The following topics address some of the questions families should discuss, which will often begin the dialogue about the type of pre-planning parents can do before a crisis occurs.
1. Do the children know roughly how much and where their parents’ assets are? Does the family have enough savings to sustain the healthy spouse should one spouse become ill and need extended hospitalization and/or nursing home care?
2. What does the income picture look like? If one spouse dies, how much income will the surviving spouse receive monthly and annually? Will there be a significant drop in income? Often time’s steps can be taken before a spouse passes to help boost the surviving spouse’s income.
3. People are living longer than ever. Many people are at risk of outliving their money. A family should not simply look at current expenses vs. income but contemplate the next step in the elder care journey. The next step is asking “Do I have enough to pay for long-term care and if so, for how long? And if not, what is my plan then?
4. What types of insurance are there (ie., health care, long-term care, life)? Is coverage adequate? If not, can coverage be realistically increased? You certainly want to consider this before you become uninsurable.
5. Is there a signed power of attorney and a health care directive in place and if so, where are they located? Are they up to date or stale? If these documents are not in place then the likely alternative in the event of a serious health setback is a costly and time-consuming guardianship. A guardianship means the courts of NJ will be involved in your family’s affairs and you may not get the outcome you want.
6. Is there an up-to-date will or trust? A clear estate plan can avoid family squabbles after a parent passes away. Even people with small estates should have a will. Be sure the original will can be located. Probating a copy and not the original is much more difficult and expensive.
For further information and advice in any elder law or estate planning matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Estate Planning Attorney