What Estate Planning Documents do Your Caregivers Need?

Entering into conversations about mortality, estate planning, and will preparation is often an emotional challenge. However, they are crucial discussions that need to be had sooner rather than later, according to a recent article, "Elder Law Guys: All the documents to have in place when you're an adult caregiver," from the Pittsburgh Post-Gazette. There are some essential estate planning documents that caregivers need.

When you find yourself in the role of an adult caregiver, it's vital to have the necessary legal documents in place to handle the financial, medical, and personal affairs of your loved ones. It gives you the authority to make important decisions and peace of mind to all parties involved.

First and foremost, a General Durable Power of Attorney (POA) is an indispensable estate planning tool. In this document which a caregiver needs, you name an agent who will make financial and legal decisions on behalf of the parent or person under care. It's wise to designate two successor agents who can step in if the primary agent is unavailable or unwilling to serve. Without a POA or capable agent, the court will have to appoint a guardian, and this might not be a family member. Estate planning attorneys will ensure your POA complies with your state's laws and allows your agent to perform the necessary actions.

Next, having a Durable Healthcare Power of Attorney and a Living Will is an essential document caregivers need. These documents, sometimes combined, name an agent to make healthcare decisions for the person under care. Naming two successor agents is a good practice if the primary agent can't serve. The Living Will specifies the person's wishes regarding life-sustaining treatment should they become unable to make their own decisions and the treating physician determines the patient is suffering from an irreversible coma, a persistent vegetative state, or an end-stage medical condition that is not survivable even with treatment.

The Last Will and Testament and Trusts are also critical estate planning documents that caregivers need. While both dictate how property will be distributed, the will takes effect upon death, while a trust manages assets during a person's lifetime. Assets owned by a trust bypass probate, enabling a swift transfer to beneficiaries while keeping the assets' value and beneficiaries' identities private.

If family members have disabilities, the estate plan should include a Supplemental Needs Trust to hold their inheritance. This prevents them from losing eligibility for needs-based government benefits. Depending on the circumstances, you might also want assets held in trust for other beneficiaries until they can manage their inheritances responsibly.

An irrevocable Asset Protection Trust is a handy tool to protect assets from the cost of long-term care and reduce or eliminate estate taxes for beneficiaries. An estate planning attorney can help determine the most effective type of Asset Protection Trust for your situation.

Additionally, Beneficiary Designation Forms are crucial. All accounts or assets with beneficiary designations should be reviewed to ensure the named beneficiary is correct.

Remember, estate planning is not a one-and-done process. You must review these documents every three to five years or when significant life changes occur. This is important because estate and tax laws change, relationships evolve, and people relocate or pass on. Regular reviews ensure these critical documents align with the person's current wishes.

Taking care of a loved one in their time of need can be emotionally challenging, but having these estate planning documents in place can make the process more manageable. It gives you the legal authority to make crucial decisions and peace of mind knowing you are doing what's best for your loved ones.

Reference: Pittsburgh Post-Gazette (July 8, 2023) “Elder Law Guys: All the documents to have in place when you’re an adult caregiver”