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How Estate Planning Helps Family Caregivers

By Catherine Hodder, Esq. | Last updated on

November is National Family Caregiver Month, a time to spotlight the contributions family caregivers make. However, if you are caring for a member of your family, you know it is a year-round responsibility. Caregiving for your loved ones takes significant time and money. AARP reports that in 2023, the value of unpaid American family caregivers totals $600 billion.

​However, caregivers do not do it for the money but to help their loved ones. It is not easy, and at times, the caregiver's quality of life suffers. Still, there are ways you can plan to make caregiving easier for your loved ones, especially with advanced care planning and estate planning documents. Learning about estate planning tools now can help your caregiver later.

How Does a Health Care Power of Attorney Help?

A health care power of attorney is a legal document where you name a health care agent, surrogate, or proxy to make your medical decisions if you are unable to due to incapacity. It is helpful to give your agent your preferences for the type of care you want. This helps your caregiver because, without it, they may have to get permission from a court to make your medical decisions.

How Does an Advance Directive Help?

An advance directive or living will outlines someone's wishes for medical treatment, especially end-of-life care. You can specify what life-prolonging measures you want or don't want. By putting your wishes in writing, your caregiver is relieved of the decision-making stress and can follow your instructions.

How Does a Financial Power of Attorney Help?

financial power of attorney is a legal document that allows you to name an agent or attorney in fact to manage your property and make financial decisions on your behalf. You should only name someone you trust with your money because they can spend your money and bind you to contracts.

Having a financial power of attorney is a tremendous help in cases where an aging parent is unable to keep up with their bills and taxes. The parent can name an adult child or other family member or friend to manage their financial life. This document helps a caregiver when they need permission to pay for medical care, home care, or nursing home expenses. And they can handle your financial planning and plan for long-term care if needed.

How Does a Special Needs Trust Help?

If your loved one has special needs and receives disability payments from the government, you may consider a special needs trust. A special needs trust is a revocable living trust that holds assets for the benefit of your loved one but still allows them to collect government benefits. Special needs trusts are sophisticated estate planning tools, so consider seeking advice from a local estate planning attorney. A special needs trust helps your caregiver know you can benefit from trust assets and still receive government benefits.

How Does Medicaid Planning Help?

Medicaid planning is another estate planning tool. Medicaid is health insurance coverage for low-income individuals who cannot afford care. However, it requires a lengthy application and approval process. Due to the complexity of income and eligibility requirements, it is best to consult an elder law attorney for legal advice. Medicaid planning helps a caregiver make sure you have the medical care you need, even with a limited income.

How Does a Will Help?

Unlike the estate planning tools listed above that are used during your life, a last will and testament is a legal document that operates after your death. In your will, you direct who you want to administer your estate, who you want to receive your property and assets, and who should care for your minor children, if necessary. A will helps caregivers you leave behind by leaving clear instructions to speed up the probate process and reduce time and money spent in probate court.

Help Your Future Caregivers and Get Your Estate Planning Documents Started Today

November is a time to honor caregivers and recognize their selfless acts. It is also a time to create an estate plan to make it easier for your loved ones to care for you if and when needed. A complete estate plan with a healthcare directive, financial power of attorney, and last will and testament gives your family peace of mind in knowing they can follow your wishes for your care.

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