Thanksgiving: Time to Make Your Family’s Financial Game Plan?

So, you’ve traveled “over the river and through the woods” to your parent’s or grandparent’s house for Thanksgiving only to discover that your loved one needs assistance. You’d rather watch the football game and eat a slice of pumpkin pie, but developing a family game plan for your aging family member’s care is more important. And once you get through the tough, but necessary, task you know you’ll be thankful you did. So, where do you start?

Be Thankful for Estate Planning

There’s more to estate planning than how assets are distributed at death. Estate plans should also include incapacity documents. The three most common incapacity documents are:

• Financial power of attorney - Designates who will pay the bills and manage the finances of the incapacitated person.
  
  
• Health care power of attorney - Indicates who makes medical decisions for the incapacitated person.
  
  
• Living will - Specifies whether the family member wants to receive life support or not.
  
  

Ask your loved one if he or she has implemented an estate plan with incapacity documents and if so, can you review them. If the documents have already been executed, then much of your game plan has been established. You can be thankful for that! If not, schedule a meeting with an estate planning attorney. You’ll be grateful you implemented the plan now rather than later.

Pass the “Roles”

So, you’ve read the estate planning documents and as you grab a roll from the Thanksgiving bread basket, you think: “What is my responsibility as financial power of attorney?”

Most financial power of attorney documents include “general durable” powers. That means you can do almost anything financial on behalf of your loved one even if they become incapacitated. You’ll need to determine if your powers are “immediate” or “springing.” If your powers are immediate and you know your mom isn’t paying her bills, you can take over that responsibility right away. If the powers are springing, then a doctor will need to attest to your mother’s incapacity before you can begin your duties.

Roles of the general durable power of attorney can include: buying or selling real estate and personal property, trading securities, paying bills and taxes, accessing the safety deposit box, purchasing life insurance policies and naming beneficiaries, suing or defending a law suit, applying for governmental benefits, and accessing business and personal records.

Be Grateful for Healthy Decisions

You’re not the only one around the table who’s concerned about roles. While your sister is taking a spoonful of sweet potatoes, she’s wondering about her role as health care power of attorney.

A health care power of attorney makes medical and health care decisions on behalf of a loved one should he or she become incapacitated and unable to communicate such decisions. As a health care representative, you have the ability to select the type of medical treatment, determine whether or not to sustain life support, and act on other health care issues that may arise. Therefore, it’s imperative that you understand your loved one’s health insurance.

If your family member is age 65 or older, he or she is probably insured through Medicare:

• Medicare Part A covers inpatient hospital procedures, skilled nursing facility stays, hospice and some home health care.
  
  
• Medicare Part B covers preventive services and medically necessary services or supplies needed to diagnose or treat a medical condition.
  
  
• Medicare Part D is optional prescription drug coverage.
  
  

Experts recommend procuring supplemental insurance to extend benefits for health care needs not provided via Medicare Parts A and B so your loved one may have a supplemental policy as well.

Medicare doesn’t pay for long-term care so you’ll need to find out if your loved one has a long-term policy or if it would be advisable for him or her to purchase one. Many of these policies provide home health care services. If you live “over the river and through the woods” you’ll have peace of mind knowing someone is taking care of your family member. Long-term care insurance will also help pay for care in assisted living or nursing homes.

Summary

Creating a game plan for an aging parent is never easy. But, as with anything, if you are prepared you will be more grateful, thankful, and successful. Furthermore, having a clear understanding of everyone’s roles and wishes will make for a more peaceful transition. Now you can enjoy the football game and the pumpkin pie!

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