Answer: The five most important legal documents that your parents should have or consider in place are 1) wills, 2) general durable powers of attorney, 3) medical powers of attorney, 4) and living wills. In some cases they might also need or benefit from a 5) revocable or irrevocable trust (including a nursing home asset protection trust).
A will states how your parents wish that their assets including real property should be distributed upon their death. A will can also include specific gifts that your parents wanted to give to loved ones once they have passed away such as gifts of money, or personal property.
Your parents should also do a careful review of beneficiary designations under 401(k)’s, 403(b)’s, and life insurance policies to make sure that they do not conflict with the will or other estate planning documents.
A general durable power of attorney appoints one or more agents to take care of your parents’ finances once they are no longer capable of doing so.
A medical power of attorney also appoints one or more agents to make medical decisions on behalf of your parents when they are no longer able to do so. These decisions are typically guided by a living will (see below).
A living will states your elderly parents’ wishes regarding what type of medical treatment they would want to receive in the event that they become permanently unconscious with no reasonable expectation of the recovery or they are terminal and can no longer make these decisions.
Revocable and irrevocable trusts can be used to: 1. Avoid probate, and 2. Shelter or protect assets from a nursing home (this is a very special irrevocable trust).
Please contact David M. Frees, III at [email protected] or call us at 888-573-7407 regarding your elder law questions.