"Caring For Aging Parents: Estate Planning Considerations"

Article By Roger Morgenthal
As the population ages, more of us will have the task of looking after our parents while we ourselves are reaching retirement age. If we—and they—are lucky, they will be able to maintain a reasonably high degree of independence, needing minimal assistance from others. Unfortunately, too many of them will suffer disability, dementia and other effects of aging, and they may become a constant obligation and burden that will weigh heavily on our “golden years.” Therefore, it is important to plan in advance for such contingencies.

It goes without saying that our parents should be encouraged to maintain an active and healthy lifestyle with exercise and good diet, so that they have a positive self-image and do not consider themselves as aged or irrelevant. They should try to find physicians who take a positive approach to geriatric medicine without prescribing more medication than is necessary.

In addition to lifestyle and medical planning, there are things that we can do to help their financial well-being, promote their safety and generally put mechanisms in place to deal with the consequences of aging and ill health. I would like to discuss some of these measures in this article.

The estate planning needs of older persons are not that different from those of younger adults, at least in a general way. Having an up-to-date Will, a current Durable Power of Attorney and a current Health Care Power of Attorney with Living Will Provisions is important for anyone. However, with advancing age, there is a greater likelihood that someone will urgently need one or more of these documents. It is important to note that the law has changed in recent years as it applies to these various documents, so a power of attorney prepared even a few years ago, for example, may not incorporate as many provisions as we would incorporate today. An outdated will, with many of the beneficiaries deceased, is obviously inadequate.

Generally speaking, estate planning documents are designed to prepare for two major life events: incapacitation and death. If planning is left until either occurs, things are much more complicated for all concerned. Although there are some opportunities for post-death estate planning, they are quite limited; and planning after incapacitation is also a challenge.

It may be surprising to learn that the legal considerations of death—as opposed to incapacitation—are often easier to deal with from the lawyer’s perspective. If someone dies without a Will, referred to as dying intestate in the law, the law specifies who receives property from the deceased and who is eligible to administer the estate. A written Will provides, of course, for disposition of one’s property after death, and it allows the appointment of an executor and/or trustee to handle affairs. It can contain many other provisions, including the appointment of guardians to care for children.

Incapacitation formerly referred to as incompetency, means that a person is not able, due to injury or illness, to take care of normal, day-to-day matters of personal business such as writing checks, paying bills, managing money and monitoring investments. Incapacitation comes in degrees and with various rates of development. A stroke, for example, can create immediate and total incapacitation, as can a serious accident. Dementia of the Alzheimer’s Type and similar illnesses may have a much slower onset, allowing planning to be done even as abilities are disappearing.

A Health Care Power of Attorney with Living Will provisions is a fairly new document under Pennsylvania Law. It allows the appointment of representatives, usually referred to as “agents,” to make decisions regarding medical treatment both during lifetime and later when death is imminent and the condition is referred to as “terminal.” If a person is capable of communicating and making intelligent decisions, he or she will still be permitted to make those decisions; but if not, then someone with the person’s best interests in mind can do so.

The most important document, in my opinion, is the Durable General Power of Attorney, which allows the appointed agents to do virtually anything in a business and financial sense for the person who has appointed them. Such powers of attorney should always be durable, incorporating language that assures that they continue in effect even after incapacitation has occurred. They should be effective until death unless they are sooner revoked. While powers of attorney may not be honored by the Social Security Administration or the Internal Revenue Service—those agencies have different forms and procedures—banks and others are required to accept them and recognize the authority of the appointed agents. Even if a person becomes totally incapacitated, a properly prepared power of attorney allows for complete management of their assets with very little difficulty.

A special word of caution regarding Powers of Attorney prepared by military lawyers for active duty and retired military personnel: They generally provide for a very limited effective period, usually five years, and after that point they lapse. Although this may make sense under certain circumstances for young military personnel being sent to a war zone, it can create immense problems for the family of an older person, who may be disabled for many years.
If someone becomes incapacitated without having a Durable General Power of Attorney in effect, the law does offer an alternate procedure, but it is not a pleasant process. Anyone with an interest in the person’s welfare, including a government agency, may file a petition for the Appointment of a Guardian, which requires medical testimony that the person does in fact suffer from a condition that has produced the incapacitation. Papers are served upon the person prior to a hearing, and generally attendance at the hearing by the “alleged incapacitated person” is required unless it can be clearly shown that this would be detrimental to the person’s health. The guardian may not be a family member or friend—often it is a bank or trust company or a professional guardianship service. If the incapacitated person is married, the spouse probably will not be appointed guardian—and he or she could end up “married to a bank.”
We recognize that if older persons do not want to do proper estate planning on their own, they may not respond well to efforts by their children to prod them into action. Often the most that can be done is to get them to meet with a lawyer to discuss planning in general, ideally one who is willing to speak with them without pressure simply to inform them as to what they might want to consider doing.

Just like children, aging parents sometimes fall in with an undesirable circle of friends. Attorneys are accustomed to hearing that a client’s parent has a “new best friend” who is trying to alienate them from the family and turn them in other directions that benefit only the “friend.” Wills get changed, suspicions are fueled against family, and other visible consequences occur that require direct action. Predatory “friends” approach their victims slowly and through their circle of other acquaintances—in my experience often through church groups. Predators make a healthy income from exploiting elderly persons, sometimes orchestrating things so that they inherit the entire estate. If you believe that your parents are being victimized in this way, it is urgent that you obtain legal representation immediately to try to control the damage and losses. There are many steps that can be taken, but it is important to act before too much damage is done.

Keep in mind that with today’s privacy laws, your status as a child does not guarantee that you can talk to a parent’s physician, insurance company or attorney without proper authorizations being in place. The two powers of attorney mentioned above help with this problem, but the best solution is to have your parents sign specific releases authorizing discussion and disclosure of private data to you. They may permit you to talk with their doctors and other professionals to arrange this, or they may decline. If you are permitted by your parents to accompany them to medical appointments, you should do so.

Watching your parents for signs of illness and pending incapacitation should be a priority. If you see them every day or even every week, you may not notice small changes in their condition. However, if you see them only a few times a year, you may be shocked by how much they have deteriorated from the prior visit. There are certain activities that can help show their functioning level—going for a drive with them at the wheel, for example. Playing cards or discussing current events may show a lot about their cognitive abilities. It is also important to be concerned if they stop doing activities that they previously enjoyed.

Symptoms of dementia and even mental illness can result from interactions between medications, including failure to take the correct dosage. Help them maintain a list of what they are taking, so that they can have this information with them for doctor visits.

If you are not in the same community as your parents, you need to establish a support system near them if possible. Try to meet some of their friends and neighbors. Ask the neighbors to call you if they observe anything that does not seem normal, and try to talk by telephone or email with your parents daily. There are professional caregivers in most communities who can provide various services such as daily visits to help with meals or taking medications, for a fee, and at some point their assistance may be necessary.

Almost as important as interacting with aging parents is maintaining a relationship with your siblings and other relatives. Ideally, all the children will be involved in the process of caring for their parents. If only one child is particularly involved in the parents’ care, he or she may feel unduly burdened; but if that child is later given a higher percentage of the estate, the others may resent it. Clear the air about who will do things for and with the parents, and try not to let any ill feelings develop. Some families are literally broken up by disputes at this stage of their lives.

At Smigel, Anderson & Sacks, LLP, we are prepared to help with the problems of aging and death. We assist people of all ages with their estate planning and issues that arise throughout life. Our approach is personal and caring, and we will work patiently with older persons. Many times we visit older clients in their homes or at nursing homes, wherever they are most comfortable.

Please call upon us if we can help with any of your family’s needs. Family is very important to each of us, and we are proud to offer personalized care and attention to each of our clients. We will meet with you to discuss our services without obligation to you.