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We expect to grow up, move out and be on our own and for our children, eventually, to do the same. The need for care as we age and the prospect of inheritance bring them back into the picture. Most people think that they are doing what is right, or doing what is necessary to achieve the right result. But maybe they are not, or simply not giving us all the information we need and respecting the time we need to digest it, our own choices and priorities.

Legal Considerations: Powers of Attorney and Wills

Rattled by an observed decline in a parent’s health or simply by tales of someone else’s experience, a child may pressure a parent to sign a Medical Power of Attorney, a Durable [Financial] Power of Attorney and a Will. Choose your own lawyer, preferably someone experienced in elder law as well as estate planning. Take your time. You may find that you are better served by a Durable Power of Attorney drafted with an eye to planning for eventual Medicaid eligibility – which you may not be able to sign later. You may find that your estate is small enough that your family will spend less money using a Small Estate Affidavit than probating a Will. You may find that all you need are bank accounts which are pay on death and a Transfer on Death or Lady Bird Deed which transfers title on death free of probate and free of Medicaid estate recovery.

Beware of signing something or taking advice from someone, whether a family member or a friend, who seems nervous or who seems secretive or vague or promises to explain later. Ask questions. Keep all family members aware of everything that is going on. Let the sunshine in.

Safeguards Against Elder Exploitation

Use checks and balances. The overwhelming majority of elder exploitation is committed by a family member using a Durable Power of Attorney. Consider granting one for ordinary expenses payable out of your checking and savings, and another, with co-agents who must act together, to access your retirement and other brokerage accounts or sell your home. Name someone else, perhaps your financial advisor or tax preparer, as a trusted contact at your bank and brokerage: someone they should call if they see something out of the ordinary.

Document, document, document. This is especially important when your spouse is gone or if you are a member of a blended family. Few families really blend. Instead, when one spouse in a second marriage becomes ill, the children of the other frequently try to effect a financial divorce, trying to make sure that their parent’s assets are not spent on the care of the step-parent. You and your second spouse may have an arrangement, keeping separate accounts, naming the children of your prior marriages. But if you do not have a Marital Property Agreement, when one of you passes, everything acquired during the marriage or commingled with money or property acquired during the marriage is presumptively community property. Your spouse’s children will be entitled to his 50% share, even if he never contributed a dime.

Your life’s savings belong to you. Make sure they are spent for your benefit and that whatever is left, if anything, passes how you plan.

 

Elder law attorney, Terry Garrett, CELA, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.

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