One of the crucial ingredients to providing top quality elder care is having the proper documentation in place to provide for a seniors’ legal, medical, and financial decision making should they become unable to officiate their own affairs. These days, there are far more options than a simple will. Power of attorney, revocable trusts, and advanced directives are all tools available to families trying to plan ahead in case of conditions that can occur at the end of life, including terminal illness, dementia, Alzheimer’s, or prolonged unconsciousness.
If that sounds dark and a little overwhelming, that’s understandable. Some aspects of senior care and estate planning can be uncomfortable to address. However, it’s important for everyone to be on the same page about not only how assets will be distributed after death, but also how to handle difficult situations that may precede a loved one passing on.
For example, the question of resuscitation can be a contentious one, as can long-term use of life support measures. Having a document like a DNR or advanced directive can ensure that your wishes are met, even if your family members don’t agree on what the best course of action may be in a medical emergency.
Appointing power of attorney well before it’s necessary can also reduce stress and help everyone know exactly what will be done in case of an emergency or serious decline. You can even appoint multiple people to have durable power of attorney. Perhaps a very close family friend is a doctor for example, and would be a reliable person to make medical decisions if you are unable to do so. Or a sibling who is a lawyer might have both the level of expertise and trust to handle your legal affairs or administer a revocable trust in case of illness or your passing.
A revocable trust is simply one of many ways to handle an estate. Rather than your heirs directly inheriting money, possessions, or property, ownership would revert to the trust, which can then distribute your assets. That can have tax benefits in some scenarios. As attorney Martin Pierce explains, “you do not have to report the transfer of any property to the trust on a gift tax return” when you file your yearly 1040. However, it doesn’t mean you skirt taxes entirely. Pierce notes that “a surprising number of people have acquired the mistaken notion that a Revocable Trust somehow avoids death taxes, possibly confusing it with an ‘Irrevocable Insurance Trust.
Another benefit of the revocable trust is that it allows you to make arrangements for after your death like a will, but also while you are alive, similar to power of attorney. You can also make changes to the trust at any time as long as you are alive and of sound mind. That gives you greater flexibility to adjust your plans if your circumstances or relationships change.
It’s never too late to discuss your options with an attorney. You can also talk with the staff at your senior’s retirement community about what documentation may be required or appreciated to provide the best possible service. Taking these extra steps now can help reduce headaches and heartaches in the future, and reduce tension in challenging situations. Now that’s a gift the whole family can get behind!