As we get older, it’s important that our adult children are prepared to manage any aging-related situations that may arise. This includes everything from having to make medical and financial decisions to determining assisted living and end-of-life strategies. Conversations about aging and the type of legacy we want to leave behind can be difficult to start. Still, they are important to have before they are needed because emotions can run high during an emergency or medical crisis. Below are some key topics to discuss with your adult children to help them better prepare.
Remember, estate laws are constantly changing, and it can be challenging to stay on top of all updates and ensure that you are taking advantage of current regulations. For example, rules vary by state, so it’s important to know what rules apply in your situation.
That’s why some people choose to work with legal professionals who can help them navigate these complexities and develop a strategy. Online tools are available, but they have some limitations. Therefore, we are happy to coordinate with your legal professional to discuss how your estate strategy complements your financial approach.
Setting up a Healthcare Proxy and Power of Attorney
One of the most important steps you can take to help your adult children prepare for possible aging-related situations is setting up a healthcare proxy and a power of attorney (POA). These legal agreements allow an adult child, or another trusted individual, to make healthcare and financial decisions on your behalf if you cannot do so for yourself. You can appoint the same person to be your healthcare and financial POA or choose two different people based on their abilities.
- Healthcare Proxy: Making your adult child your healthcare proxy allows them to make crucial decisions related to your healthcare if you are incapacitated. This includes accessing your medical records and deciding on medical tests, medications, and surgery. Your proxy will also be responsible for requesting or declining life support treatments for you and choosing which hospital, medical facility, nursing home, or hospice is best. Furthermore, your proxy will be the one who communicates with your family members about your condition and treatment plan.1
- Financial POA: The child named your financial POA is responsible for managing the financial aspects of your life if you cannot continue making such decisions due to incapacity. Your POA can pay your bills, file your taxes, manage any property you may own, and apply for benefits on your behalf. Make sure to set up a "durable POA" because it is designed to stay in effect if you become unable to handle related matters or make decisions on your own.1
A healthcare proxy and financial POA can be set up by working with an attorney or using online resources. Families should prepare these legal agreements long before incapacitation is a factor. Without a medical and financial POA, your family members may have to go through a lot of red tape and deal with many expenses at an emotionally stressful time to obtain the guardianship required to make these decisions.
Getting a list of all doctors and medications
Providing your adult children with a list of your doctors and medications is important, as there will be times when it will be helpful for them to make appointments and ensure that your medication routine is maintained. It also enables them to ensure proper medical care in emergencies. Making sure they understand your medical needs will help them make informed decisions and avoid duplicate treatments. By keeping this information updated and accessible, you can help your adult children be proactive and knowledgeable about your medical care.
Creating a living will
A living will is different from a will. A will outlines the inheritors of your assets after you pass away. However, a living will serves as your voice when you may not have one. It can significantly ease end-of-life decision-making for your adult children. A living will is a legal document that informs your family, healthcare proxy, and doctors about your preferences for medical care at the end of life. These legally binding written instructions can provide clarity and closure to your loved ones, help resolve conflicts or disagreements among family members, and limit the emotional burden on those closest to you.2
As with healthcare proxies and POAs, a living will can be created through attorneys or online resources. If creating one on your own, remember that states have different laws and practices, so be sure to write a living will recognized by your state and follow the rules about what kind of witnesses you should use and whether the document needs to be notarized.
Accessing account information and passwords
Another critical aspect of preparing for aging-related situations, especially in today’s digital world, is to provide your adult children with account information and a list of professionals linked to your estate. The list should include your financial advisor, CPA, attorney, and any other professionals who have played a role in facilitating your estate strategy. Your account information should include your bank and investment accounts. Remember to add details about your primary residence and other properties.
Accessing key documents
In addition to account information, consider giving adult children access to your key documents, such as living wills and insurance information. These documents can provide important details about your assets, liabilities, and end-of-life wishes. If you have stored these documents in a secure location, be sure to show your children where the keys are located and provide details on how to access the safe location.
Understanding wishes related to where you want to live
You should consider having open and honest conversations about where you want to live as you age. One choice to consider is assisted living, which can take many forms, including in-home care, adult daycare, and assisted living facilities. If you decide to stay in your home, make sure that the choice is clear to your adult children. If necessary, you may want to outline how you plan to pay for in-home care rather than leaving your children to guess as to how to finance your stay-at-home choice.3
Preparing ahead can be a gift to your family
As we age, it’s important to be prepared for any situations that may arise. "Getting our affairs in order" may sound like a cliche, but it’s one of the most thoughtful things you can do for your family.
By taking the time to talk with your adult children, you can take some of the coming burdens off their shoulders and ensure that your wishes are carried out. Taking action now and preparing for these issues are important.
Of course, each person’s situation is unique, so specific details will vary. As financial professionals, we can meet with your adult children or other trusted individuals and facilitate the initial dialogue and any next steps. We can also play an important role in coordinating with other professionals, such as attorneys who have played a role in your estate strategy.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
1 TrustAndWill.com, 2023
2 USBank.com, August 30, 2022
3 AgingCare.com, March 22, 2022