Caring for Aging Parents: A Primer for Adult Children
Nothing brings a Thanksgiving dinner conversation (in person or by video) to a stop like asking a parent about their aging plan.
But it’s an entirely appropriate – and important – topic to raise, albeit maybe after the meal. It’s never too early for adult children to talk to parents about future medical care, housing, finances and personal needs.
Of course, each family is different and the comfort levels will vary. Most parents will be happy to share the names and contact details of their doctors and trusted advisors, their living will and their healthcare proxy. Some may be comfortable sharing more; others won’t, but should be encouraged to at least point their children in the right direction if and when the need arises.
At some point, and again, sooner rather than later, parents will have to designate who among their family (or others) can access personal information and medical records, user names and passwords for digital assets and online accounts, financial information (ideally a balance sheet that outlines all assets and liabilities and cash flow information) and key estate-planning documents, including a will, a power of attorney and a revocable living trust.
Every adult child should understand his or her role. If there’s an emergency, what is the plan and how will it be carried out? Anyone named as the healthcare agent or successor trustee or given power of attorney should be prepared to make decisions based on their parents’ wishes. For example, is a respirator OK in certain circumstances? That’s an unfortunately timely topic in this pandemic, and one that should be addressed well in advance of any need.
For many families, one of the most difficult aspects of the aging process to broach is the cost. Long-term care services add up quickly and can be expensive, and are generally not covered by health insurance. The national median cost for an assisted living facility is $48,612 per year, while the median cost for a 24-hour/7-days-a-week home healthcare aide is over $200,000 a year. And that’s just the average. In New York City, a high-end assisted living facility can cost over $250,000 per year. It’s daunting but it’s not insoluble, with the right planning in place. The important thing is to address the challenges, as early as possible.
At Evercore Wealth Management, we help our clients and their families plan and invest to meet the challenges of life’s big transitions. We know that the earlier these conversations start, the sooner families can find peace of mind and get back to enjoying each other here and now.
Jen Tse is a Vice President and Wealth & Fiduciary Advisor at Evercore Wealth Management and Evercore Trust Company. She can be contacted at email@example.com.
- Healthcare Proxy or Agent: Designates another person, or agent, to make medical decisions for the appointing individual when he or she is unable to do so. Adult children should ensure that their parents’ healthcare proxy includes a Health Insurance Portability and Accountability Act, or HIPAA, provision, which allows the agent to access medical information.
- Living Will: Describes desired and undesired medical treatments in the event of a terminal condition, which will govern when an individual is no longer able to make his or her own decisions.
- Digital Assets: Images, photos, video and password-protected data, including social media and cryptocurrencies that are stored digitally.
- Will: Outlines how a person’s real and personal property, or estate, will be managed and distributed after death. Also appoints guardians of minor children, and executors who will carry out the person’s wishes, often under court supervision and oversight.
- Power of Attorney: Appoints an adult child, other family member or friend, or a trusted advisor as an individual’s agent to make authorized financial and legal decisions for the appointing individual during his or her lifetime. The terms can be limited in scope to take effect only upon the appointing individual’s incapacity, as the document terminates at his or her death.
- Revocable Living Trust: A revocable living trust is a trust created by an individual, also known as the grantor, who reserves the right to change, revoke, or cancel the trust during his or her lifetime. Revocable living trusts are commonly set up with the grantor as the initial trustee, with a named successor trustee (either one or more individuals, or a trust company, or both) who can step in and serve in the event of the grantor’s death or incapacity. Revocable living trusts are a common tool substitute for a will are used to dispose of assets at death, serving as a will substitute to avoid the court supervision, or probate process, that a will is often subject to. Most assets can be transferred to a revocable living trust during the grantor’s lifetime, and the trust will govern how they are to be distributed upon the grantor’s death.
- Long-Term Care: Services not covered by medical insurance that help meet both medical and non-medical needs, including daily personal tasks, of people with a chronic illness or disability who cannot care for themselves.
- Successor Trustee: A person or trust company who takes the place of a prior trustee when the prior trustee is unable to continue with his or her responsibilities due to removal, resignation, death, or for any other reason.
IRS Circular 230 Disclosure:
Pursuant to IRS Regulations, we inform you that any U.S. Federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for (i) the purpose of avoiding IRS imposed penalties or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. This information is provided for information purposes only and does not constitute financial, investment, tax or legal advice.
©2016 Evercore Wealth Management LLC. All rights reserved.