Help Aging Parents Plan for Disability, Long-term Care, and Financial Protection

By Barbara Coenson
Attorney at Law

 Caring for aging parents is an act of a love but a sudden physical or mental illness of a parent can create the need for crisis intervention and tough choices regarding disability, long-term care, and financial protection. Planning prior to a crisis allows parents to express their wishes about their care in the event of disability. Planning prior to a crisis helps children understand their role should they have to care for an elderly parent.

Plan for Disability

Disability planning allows elderly loved ones to designate who will have the decision-making powers needed to protect their health and financial well-being if they become incapacitated. Durable powers of attorney, living trusts, healthcare surrogate designations, and living wills can provide such protection and empower aging parents to select who they want to assume these responsibilities.

Without planning, a court-ordered guardianship may be necessary, subjecting a disabled elderly loved one and appointed guardian to court oversight for as long as the disability continues.

Tom had a stroke and lost the ability to manage his finances and healthcare. His daughter, Pam, had to petition the court to have herself appointed as guardian to protect Tom’s assets and oversee his healthcare. Pam must continually seek court approval for her care of Tom’s finances and well-being. Tom may have avoided guardianship and court involvement with prior disability planning.

Plan for Long-term Care

Long-term care planning can help preserve assets and provide alternative ways to pay for long-term care. Planning becomes essential to prevent one parent’s illness from depleting assets, leaving the other parent with few resources on which to live.

Long-term care planning requires understanding the possible progression from at home care, to an assisted living facility, and to a nursing home, all of which are increasingly more expensive. Long-term care insurance policies vary in coverage and may or may not cover all costs. Public benefits such as Medicaid and Veteran’s benefits can help. Planning can preserve assets while enabling eligibility for these benefits.

Phil and Marge transferred a portion of their wealth to an Irrevocable Trust allowing for income distribution to their children. Six years later, Phil becomes ill and enters a nursing home. The assets transferred to the Trust are not considered when determining Phil’s eligibility for Medicaid benefits to pay for nursing home costs. The children have access to additional income to help Marge with her bills.

Plan for Financial Protection

Financial planning allows elderly loved ones to design their quality of care during their life and prepare an estate plan to pass wealth to loved ones upon their death. Planning for quality care can prevent family members from having to deplete their wealth to pay for an elderly loved one’s care. Estate planning, including trusts, wills, and other strategies, empowers parents (both young and old) to make decisions now about how to pass their property to family, friends, and charity.

Caring for aging parents is an act of love, but without proper planning, it can also be a hardship for children, spouses, and other caregivers.

Lake Mary Life May/June 2011

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