For many of us, Thanksgiving is going to look a lot different this year. In light of COVID-19, families will be gathering around the computer screen rather than the dining table to keep everyone safe, especially older parents and loved ones at greater risk.
The continuing rise of coronavirus cases in Illinois and across the country is also prompting many people to think about their own mortality — and the importance of planning for the aging and passing of loved ones. Still, a recent survey shows that less than one-third of adults in the U.S. have estate planning documents like a will or a living trust, and only 20% of those surveyed said they had talked to a loved one about their end-of-life wishes, a crucial first step in the planning process.
While it’s never an easy conversation to have, Thanksgiving is a perfect time to discuss this with those who matter most to you. But how do you segue from talking about your mom’s chestnut stuffing recipe to what happens when she dies? Here are some pointers for starting the conversation with loved ones and planning for whatever the future holds.
Choosing the Right Time and the Right Words
As with most things, timing is everything. It’s probably best to wait until you’re fairly sure everyone’s eaten, so that your video chat doesn’t catch anyone mid-meal. Then bring up the subject with kindness and sensitivity. You want aging family members — like parents and grandparents — to feel that asking about their final wishes is not only about you taking care of them, but also about them taking care of you. Let them know this is a loving thing to do, so that you have the information you need if something happens to them.
The Key Documents Everyone Needs
Talk about the basic documents they need to have in place to protect themselves and the rest of family. These can include:
A will: A will is a legal document that lays out instructions on how your property you own in your own name when you die should be distributed. A will is the “instruction manual” for what happens to your assets during the probate court process. Without those instructions, the state’s “default rules” decide who gets what (and do you really trust your state legislature with that responsibility?). Having a will does not avoid the probate court process, it merely provides clarity of what should happen during the court process. You can also use a will to:
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- name someone to carry out your wishes
- name who you want to be the guardian of your minor children
- decide how to pay for debts and taxes
- provide for pets
A trust: A trust is an easy way to have one legal device to control your assets while you are alive and well, when you become mentally disabled, and after you die. Assets held by a trust avoid the probate court process when you die. The easiest way to explain it is to picture a trust as a bowl of candy — the assets in the trust are pieces of candy, and the bowl provides instructions on who can eat the candy and when.
Records of jointly held assets and beneficiary forms: There are certain assets that wills can’t cover. These include jointly held assets (like a house, a car, or a bank account) and those that include a beneficiary (like life insurance or investment accounts). When you die, the joint assets go to the surviving joint tenant. The named beneficiaries of an account or insurance policy inherit those assets. Sound simple? Unfortunately, if you transfer all of your assets this way, there will not be any assets in your estate to pay expenses (funeral, accountant, lawyer) or taxes. This can cause problems if the person managing your estate cannot get any of the money back from the surviving joint tenants or beneficiaries. This is a big problem with many of our clients, so think carefully about taking the easy way out.
Powers of attorney: A power of attorney (POA) is a document that appoints someone you trust to make decisions for you if you become mentally incapacitated. There are two types of POAs that it’s important to have in place:
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- Healthcare: This is a document that legally authorizes loves ones to make medical and health-related decisions on your behalf.
- Financial: These are POAs that authorize someone to take care of family and business-related financial matters for you, allowing them to access bank accounts, pay bills, and file taxes on your behalf.
Other Topics to Cover
Healthcare: Talk about what happens if you or a family member is diagnosed with COVID-19. Since it’s tough to lobby for much of anything once you’re in the hospital, it’s important to know what kind of care you and your loved ones want (for instance, life support) and have important documents in place in case you’re knocked out of commission.
Besides a healthcare POA, it’s also important to have a HIPAA consent form. HIPAA stands for the Health Insurance Portability and Accountability Act, a law that protects the sharing of an individual’s medical information. Providing the names of family members and loved ones on this form lets you make sure they’re able to get updates on your health and have to access to your medical records if they need it. That way, they’ll have the information they need to make healthcare decisions on your behalf if you’re not able to.
Long-term care: Maybe your mom is starting to forget things. Or your dad had a fall, and you’re scared it’s going to happen again. If you have a parent or loved one who’s getting frail, odds are they’re going to need long-term care. According to the U.S. Department of Health and Human Services, someone turning 65 today has a 70% chance of needing long-term care in their remaining years.
Talk about how you’ll handle the caregiving responsibilities and what to consider if you decide on assisted living or need nursing home placement. Long-term care can be extremely expensive and involve hundreds of thousands of dollars in annual costs. The best thing is to consult with a professional who understands how insurance, assets, and public benefits can help pay for long-term care.
No one can predict the future. That’s one reason these discussions are so uncomfortable. The important thing is to take the right steps now to protect the people you love. By bringing everyone into the conversation this “Thinksgiving,” you can help make sure your loved ones’ wishes are carried out and that they’re protected when they need it most.