Wondering How to Protect Your Parents’ Assets as They Age? Or how about when to have that dreaded conversation about not driving anymore? What about when to insist that you go to the doctor’s appointment with them? These questions are tough and the answers are even tougher. But looking at the consequences of not stepping up to protect your parents’ assets may inform your decision.
A couple of months ago, I was preparing for my week of appointments and saw a name I recognized. I pulled the file memo and remembered that – we will call her Mary – had come in several months ago to discuss planning to protect her assets.
Mary was 86 years old with an estate of about $350-400,000 in value. Mary had early dementia symptoms that made it difficult to manage her medication. She had macular degeneration and arthritis. She had fallen a couple of times in her home, but did not want anyone to come in to help her and was not willing to move to an assisted living facility.
At that time, Mary was not ready or willing to give up any of her independence. She was not interested in doing any asset protection planning. She was not willing to consider the risk she was taking when she continued to drive despite her doctor’s suggestion that she not. She only wanted a Will so she could list out who got her jewelry and the family china dishes.
Mary came to that appointment with her adult daughter – we will call her Jo Anne. Jo Anne sat quietly through much of the appointment looking sad and maybe a bit frustrated. I tried to ask Jo Anne her opinion of what we had already discussed to protect Mary’s assets, but Jo Anne shyly laughed and said, “You can see how Mom is. She knows her mind and she runs the show. Always has and always will.”
When I walked into the appointment this time, only Jo Anne came. Mary was hospitalized. She had been in a devastating car accident that left her with several broken bones and a punctured lung. She was looking at months of rehab. More importantly, the car accident was Mary’s fault. She failed to stop at a red light and T-boned another car, killing the passenger in the car and seriously injuring the driver.
Jo Anne handed me court papers where the family of those in the other car were suing her mother. We spent the appointment discussing how this lawsuit threatened to wipe out her mother’s $350-400,000 estate and if there was anything we could do at this point to protect it.
Mary’s case is an extreme example of the consequences of ignoring the warning signs of not stepping up when we know our parents need help or when our parents’ assets could need protection.
Tag Along to Medical Appointments
This may not seem like it has anything to do with protecting your parents’ assets, but it does. The number one expense that depletes retirement/life savings is health care costs and costs of long term care. The majority of bankruptcies in this country are triggered by unpaid medical bills of insured. Your parents are getting critical information from their health care providers at their appointments. This information may help them avoid costly treatments or have less expensive preventative procedures. By being there you will be able to hear the doctor’s advice and act on it sooner rather than later.
Review Insurance Coverages
Do your parents have a health care supplement policy? Do they have adequate auto insurance in place? Are they paying these premiums? These sound like simple questions, but when a person begins to live on a fixed income, they may be scared of large insurance premium bills and they may let them slide. Without proper coverages, your parents’ assets are risk.
Get Advanced Directives in Place
Advanced Directives is just a fancy name for Powers of Attorney. Without a proper Power of Attorney in place, you would have to seek guardianship of your parent in order to take care of their medical or financial affairs if they are incapacitated. Guardianship costs money and exposes assets unnecessarily.
Get Estate Planning Documents in Place
Without the proper estate planning documents, your parents’ estate may end up in probate court, which typically costs anywhere between 4-11% of the value of the estate assets. These costs can be avoidable.
Do Asset Protection Pre-Planning
You may have heard of the “Five Year Look Back”. This means that if your parents’ assets are in an asset protection trust for five years, they are protected from nursing home spend down. This type of planning is remarkably simple for most estates.
Look for Scam Activity
Every time I visit with my elderly loved ones, I try to ask them questions about any strange phone calls they have gotten, their internet use, mail order shopping, etc. I even try to get a quick glance at the check book to make sure there is no strange activity going on. Scammers are predators – very convincing predators. They know just how to push seniors’ buttons and deplete assets before anyone is the wiser.
Make sure your folks have a good alarm system in place. Many systems allow for medical emergency calls too. Good security technology in exchange for a modest monthly fee can protect your parents’ assets and lives!
The best way to keep a handle on risk and whether your parents are staying safe and keeping your parents’ assets protected is to talk to them. Ask questions. Find out what they do on a daily basis. Make sure you know where the important papers are filed. Do you know who to call if your parents are incapacitated and you need to access their financial accounts for them? If not, have a sit down with your folks to talk about these important matters.
Do you think maybe it’s time to sit down and discuss these options regarding your own parents or family assets? Some elder law attorneys charge for an initial consultation, but some do not. There is nothing to lose by signing up for a free consultation with an elder law attorney at Applegate & Dillman Elder Law to talk through ways to protect your parents’ assets. Discussing these options and the future of your parents could save you money and stress later.
What is keeping you from scheduling a free consultation to discuss legal pre-planning? Give our office a call today to schedule your free consultation at (317) 492-9569.