A recent column by financial planning expert Liz Weston answers a question that many people with elderly parents have. When a parent has to transition into an elder care facility, such as a nursing home, how will this affect the elderly parent’s finances?
Nursing homes and other eldercare facilities are notoriously expensive, costing as much as $150,000 a year or more. If your elderly parent hasn’t taken appropriate steps these costs can quickly reduce their savings.
If the parents haven’t already done so, you will want to sit down with them and discuss what options are available as you contemplate nursing home expenses. It’s important, for example, for all aging seniors to have created both healthcare and financial powers of attorney. These two documents will allow someone else to make important medical decisions when the elderly person is no longer able, as well as manage financial decisions on the elderly person’s behalf.
Further, it is possible to protect an elderly person’s assets by using a number of different estate planning tools. For example, it may be possible to develop a Medicaid plan that allows the elderly person to use Medicaid to pay for the costs associated with elder care facilities, while at the same time protecting as much of his or her assets as possible.
It can also be beneficial to create a gift plan that allows the elderly parent to begin transferring assets to friends and family members on a regular basis. An effective gifting plan takes advantages of estate and gift tax exemptions to benefit both the parent and the gift recipients.
You can learn a lot more about estate planning in our next free Legacy Wealth Planning Workshop. Contact our offices for registration details or register online at www.mrobinsonlaw.com.