In most such cases, the adult child will need to work with an elder law attorney and petition the court for conservatorship. Much like probate, a petition for conservatorship:
- Makes your parent’s financial holdings public (problematic if you have someone in the family who you are concerned about and who may try to take advantage of your parent’s incapacity until the issue is settled by the courts),
- Can be expensive (especially if contested), and
- Can take months, even years for the process to be completed.
In the meantime, if your parent’s assets are not properly funded into a trust, they remain at risk.
Furthermore, should your parent pass away, their estate will be subject to estate taxes, which although not an issue for many during 2011 and 2012, in 2013 tax rates could return to the less favorable rates of up to 55% on estates over $1 million.
So, how can you best advise your parents or grandparents?
- First, have that difficult conversation. Explain what risks they are taking and possible consequences of doing nothing, or of doing the wrong thing.
- Consult with an estate planning attorney to design an estate plan that will work the way your parents would like. If your parents choose for you to serve in a trustee role, understand your responsibilities and know exactly what you need to do and when.
- Be sure all their assets are properly funded to their trust and not vulnerable to creditors or third-party lawsuits.
- Make absolutely sure that your parents all their healthcare directives in place, and have selected a disability panel made up of family, friends, perhaps their primary care physician and even their pastor, priest or rabbi, so the decision of when to ask others to step in and help, will not be made by just one person.
- Based upon their wishes, explore options for long-term care insurance.
- Stay in close contact with your estate planning attorney. Make sure any changes in estate law, estate taxes or life changes (births, deaths, marriages, divorces, changes in assets) are all reflected in your parent’s estate plans.
- Lastly, and equally important as all the legal aspects to your estate plans, capture precious moments with your parents. Our Priceless Conversations™ are an ideal way to record family histories, stories, values, wishes and dreams in a way that will allow your family to relive those special times, even long after our parents are gone.
If you’d like to discuss planning options for you or a loved one, call our office at (919)443-3035 to register for an upcoming seminar or to schedule a Vision Meeting.
