If your parents don't have basic estate planning documents, it can cause chaos when one or both of your parents get sick or die. And major decisions will fall on you and your family members to sort it out. And if you have a blended family, things can become more complicated.
There are three essential documents for a simple estate plan:
- A healthcare directive
- A financial power of attorney
- A last will and testament
These documents help let you know what your parents want if they become sick, unable to manage their affairs, or pass away.
What Is a Health Care Directive?
A healthcare directive or advance directive combines a health care power of attorney with a living will. It allows your parent to name you or someone else to make their health care decisions if they are unable to speak for themselves. Due to HIPAA privacy concerns, medical professionals may not discuss their condition without one. And within a healthcare directive, your parent can specify what medical care and life-prolonging measures they want or don't want so their wishes are followed. A directive saves a lot of stress and conflict among family members. If these end-of-life decisions are left to your family, there may be arguments about what is best.
What Is a Financial Power of Attorney?
A financial power of attorney is helpful when your parent can no longer manage their finances independently. They can name you or someone they trust to handle their money, pay bills, and act in their best interest. If they are suddenly hospitalized, someone can keep up with bills, tax payments, and financial matters for them.
What Is a Will?
In a last will and testament, your parent names someone to handle their estate administration, distribute their money property to beneficiaries they choose, and provide for minor children or dependents. They can also make charitable donations. If a parent dies without a will, they are “intestate," and a probate court follows state laws to distribute their property. A will streamlines the probate process, saving time and money on legal fees.
With online estate planning forms, helping your parents with the estate planning process can be easier than showing them how to operate their TV remote. However, you may want to consult an estate planning attorney if your parents:
- Are wealthy and need specialized estate tax planning
- May outspend their assets and require Medicare planning
Estate Planning Beyond Legal Documents
However, estate planning conversations aren't just limited to legal documents. You should review bank accounts, life insurance policies, brokerage and retirement accounts, and real estate deeds to check and possibly update the beneficiary designations. Such accounts and policies transfer by the terms of their documents and not through a will. If no beneficiary is listed for an account, the account goes into probate.
Additionally, you may want to talk with them about their long-term care planning if they have an incapacity and can no longer take care of themselves or remain in their home.
No Time Like the Present
Get to it! Your parents must execute their estate planning documents before facing mental difficulties such as dementia or Alzheimer's.
You can help them find an estate planning attorney, or if they have simple estate planning needs, they can use online legal forms to create their will, power of attorney, and healthcare directive. And helping with your parent's estate plan gives you peace of mind in knowing that you understand your parents' wishes.
But most importantly, it can spare you and your loved ones additional stress during a difficult time.
Related Resources:
- How to Talk About Estate Planning With Your Parents (FindLaw Legal Forms and Services Resources)
- The Dos and Don'ts of Talking to Your Parents about Estate Planning (FindLaw's Law and Daily Life)
- Create Your Estate Planning Documents Now (DIY Estate Planning Solutions)
