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Elder Law Estate Planning

End of Life Planning for Loved Ones

It’s definitely an uncomfortable thing to do. However, making funeral arrangements for yourself eliminates a lot of stress and anxiety for the family members, who are left to guess what you may have wanted. This, says the Leesville Daily Leader in the article “Planning for the end of your life” lets you make the decisions.

When considering end-of-life care for loved ones here are some of the things to consider:

  • Do you want to be buried or cremated?
  • Do you want a funeral or a memorial service?
  • What music do you want to be played?
  • Do you want flowers, or would you prefer donations to a charity?
  • Do you want people to speak or prefer that only a religious leader speak?
  • What clothing do you want to be buried in?
  • Have you purchased a plot? A gravestone?
  • Who should be notified about your death?
  • Do you want an obituary published in the newspaper?

There are also estate matters that need to be attended to before you pass. Do you have a will, power of attorney, healthcare power of attorney, or a living will? Make sure that your family members or your executor know where these documents can be found.

If you do not have an estate plan in place, now is the time to meet with an estate planning attorney and have a plan created.

Your family will also need to be able to access information about your accounts: investment accounts, credit cards, utility bills, Social Security, pension, retirement funds and other assets and property. A list of the professionals, including your estate planning attorney, CPA and financial advisor, along with the names of your healthcare providers, will be needed.

If you are a veteran, you’ll need to have a copy of your DD-214 in your documents or let family members know where this is located. They will need it, or the funeral home will need it, when applying for burial benefits from the Department of Veterans Affairs and the National Cemetery Administration.

If you wish to be buried in a national cemetery, you’ll need VA Form 40-10007, Application for Pre-Need Determination of Eligibility for Burial in a VA National Cemetery. This must be completed and sent to the National Cemetery Scheduling Office. Include a copy of the DD-214 with the application.

End-of-life care for loved ones grieving in your family may find discussing these details difficult, but when the time comes, they will appreciate the care that you took, one last time, to take care of them.

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Elder Law Estate Planning

How to Decide Who Your Healthcare Proxy Should Be

It’s especially important to name a healthcare proxy, because the chances of having a crisis escalates dramatically as we age. That’s why so many people put off naming a healthcare proxy, says Forbes in the article “How to Select A Healthcare Proxy,” often only addressing this, when they are completing other documents for their overall estate plan.

What usually happens is that people get so stressed out about naming a healthcare proxy that they put it off or make a bad selection. Making it even worse, is neglecting to tell the person they have chosen for this important responsibility.

healthcare proxy comic

How to Decide Who Your Healthcare Proxy Should Be. It’s not guaranteed that the person you chose as your healthcare proxy will ever be called on to serve. However, if they are, you’ll want to make sure they meet certain guidelines. For one thing, they’ll need to be at least 18 years old. They cannot be your direct health care provider or any of the direct health care provider’s employees, unless that person is also your spouse. They have to be willing to speak up and adhere to your own wishes, even if those wishes are not the same as their own. You’ll want to have a very candid conversation with the person you think you want to name as your healthcare proxy.

You might want to go through this exercise to make sure they are really willing to carry out your wishes. Create a worksheet that describes in detail some of the situations they may face. There are a few sources for this kind of worksheet, including one from a group called Compassion and Choices, a nonprofit centered on helping people get what they want at the end of their lives.

If you are close with your family, it may seem obvious to select your spouse, first-born child, or a sibling for this task. However, be realistic: when push comes to shove, will they be able to stand up for your wishes? Will they be able to deal with the fallout from family members, who may not agree with what you want at the end of your life? They’ll need to be up to the challenge.

Age is a real factor here. You want your proxy to be available in both the immediate and distant future. If you have a sibling who is only two years younger than you, she’ll be 81 when you are 83. That may not be the time for her to make hard decisions, or she may not be available—or alive. Select a few backups, and make sure the primary, secondary and even tertiary are listed on your advance directive.

Geography also matters. The person may be called upon in a crisis—if you are on the West Coast and they are in the Midwest, will they be able to get to your bedside in time? Many hospitals and skilled nursing facilities require a live human being to be physically present, if critical care decisions need to be made. Someone who lives within a 50-mile radius of you, might be a better choice.

Once you’ve made the decision, you’re almost done. Have a conversation with the person, whether they are the primary or a backup. You should also have a conversation with your estate planning attorney, to make sure that your healthcare directive and any related documents are all set for your future.

Reference: Forbes (April 10, 2019) “How to Select A Healthcare Proxy”

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Estate Planning

What Will My Social Security Benefits Be?

Your Social Security benefits in retirement are primarily dependent on the wages you get while working. The Social Security taxes deducted from your paycheck are based on that amount. If you’re still working and at retirement age, you can get benefits while earning other income. And depending on your age, you can also decrease and delay your Social Security payouts. The other important factors for determining Social Security benefits include inflation and the formula used by the Social Security Administration in its calculations.

Investopedia’s recent article asks “How Are Social Security Benefits Affected by Your Income?” The article explains how Social Security income is calculated—the more you earned while working, the higher the income benefit you get from Social Security. The government keeps track of your income from every year, and the part of your earned income subject to FICA taxes is used to determine your benefits in retirement.

What Will My Social Security Benefits Be?
If you paid into the Social Security system for more than 35 years, the Social Security Administration only uses the 35 highest earning years and won’t include any others in its formula. If you didn’t pay into the system for at least 35 years, a value of $0 is entered for all missing years. After you apply for benefits, these earnings are indexed and used to calculate a “primary insurance amount” that shows the maximum sum you’re eligible to receive after reaching full retirement age. The age when you begin getting benefits is also significant. As of 2018, the youngest age to receive benefits is 62. However, your benefits are reduced if you opt to get them that early. But if you take benefits prior to reaching full retirement age and continue to work, you may be able to delay some benefits to get higher payouts in the future. These days, many folks are working into or beyond retirement age. If you are earning an income while getting Social Security benefits, you may have some benefits withheld if you make up to a certain threshold. Until you reach full retirement age, earning more than the IRS income threshold decreases your benefits by $1 for every $2 earned in excess of the minimum. That money isn’t lost forever. Instead, your Social Security income is upped once you reach full retirement age. Under normal circumstances, your Social Security benefits aren’t taxable. But if your income while taking benefits is more than the maximum limits established by the IRS, your benefits will be partially taxable. Nonetheless, no one has to pay income taxes on more than 85% of benefits.
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Estate Planning

Why Do I Need an Estate Plan?

“Some are sad.
And some are glad.
And some are very, very bad.
Why are they Sad and glad and bad?
I do not know.
Go ask your dad.”

Dr. Seuss, One Fish, Two Fish, Red Fish, Blue Fish

Did you know that more than half of American adults—and 78% of millennials—don’t have any basic estate planning documents like a will or living trust? It may not be that much of a shock, since younger adults tend to put off thoughts of estate planning. However, even if you don’t have children or many assets yet, you can benefit from creating an estate plan now. Forbes’s recent article, “6 Reasons Why You Should Have An Estate Plan,” provided six reasons why you should have an estate plan at any point in life:  

Why Do I Need an Estate Plan?

Plan for yourself.
A big step in the estate planning process, is deciding who will make decisions on your behalf, if you’re unable to do so yourself. If you become incapacitated, a revocable trust will hold assets for your benefit, while you’re alive and name the individuals you want to receive your property when you pass. Designating an agent under a durable power of attorney to act on your behalf when it comes to financial and legal matters, if you become physically or mentally disabled, can help make certain that any decisions made, are in your best interest. If you can’t make medical decisions for yourself, you should have a healthcare proxy, agent or power of attorney, HIPAA release, and living will.

Decide How to Dispose of Your Wealth.
A will names an executor or personal representative who’s responsible for the administration of your estate after you die. He or she distributes property, as you determine in your will. If you have minor children, you can also designate a guardian to care for them in your will. Any life insurance, retirement accounts, or annuities require you to name beneficiaries, so they don’t need to be included in a will.

Lessen Transfer Taxes.
One goal of estate planning is to maximize the wealth you transfer to your beneficiaries, along with minimizing transfer taxes. The Tax Cuts and Jobs Act of 2017 expanded the amount individuals may give away at death—or during life—without any transfer taxes. The new law offers an increased exemption amount and portability. That means spouses can share one another’s exemption. You can make annual tax-free gifts up to $15,000 in 2019 (twice this amount for married couples). You can also pay medical and educational expenses for someone else without any gift tax.

Include Charitable Giving.
If you have philanthropic goals, an estate plan can help make certain that your objectives are satisfied. You can select a charity that’s important to you, choose the assets you want to donate, and decide—along with your attorney—the best way to make your gift.

Protect Family Wealth.
There can also be wealth protection benefits in estate planning through asset ownership arrangements, insurance, limited liability entities, irrevocable trusts and asset protection trusts. These are designed to protect your assets from creditors. An experienced estate planning attorney can help you decide, if one of these options is appropriate for your situation.

Ready your Family to Receive Wealth.
You can also prepare the next generation to receive wealth, which can also be helpful in preserving family wealth in the long run. Your estate plan can set out wealth planning goals, facilitate conversations about what wealth means to your family and educate your adult children about financial ideas and the ways in which they can get involved in creating and sustaining the family legacy.

Why Do I Need an Estate Plan? Estate planning can be a formidable task, especially if you’re starting from ground zero. However, you can always engage an estate planning attorney to help you develop the documents you need to give you peace of mind about your financial affairs.

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Elder Law Estate Planning

Estate Planning When A Family Member Is Disabled

This kind of mistake can wreak havoc on many lives, which is why it is so important to work with an experienced estate planning attorney who is knowledgeable about special needs planning. The article, “Crafting an estate plan to include disabled family members

 from The Ledger explains what is involved in special needs planning.

Supplemental Security Income (SSI) is a federal program that pays monthly benefits to disabled or blind adults and children. To qualify, an individual must have fewer than $2,000 of countable assets and very limited income. Medicaid is a Federal and State health insurance program that helps people with limited assets and income pay for their medical costs.

While it is common for people to name their spouse or children as beneficiaries in their estate plan, if your spouse or child is disabled and receiving government benefits, an inheritance will result in their loss of benefits, unless special planning is done.

Estate Planning When a Family Member Is Disabled. Special Needs Trust (SNT) is designed for disabled beneficiaries so that cash, real property, or any other assets are available for the person’s benefit, while still allowing the disabled person to receive their means-based government benefits.

There are several different ways to accomplish this, depending on your family’s situation. One way is to have a testamentary Special Needs Trust created within a will or trust that goes into effect, when the creator of the trust or the will dies. A SNT can also be created while you are living and can be funded, instead of waiting for it to go into effect at your death.

A third-party SNT can be named as the beneficiary of life insurance policies and retirement accounts, investment accounts or real property. The third-party SNT assets that are not used for the disabled beneficiary during their lifetime, can pass to non-disabled beneficiaries upon the death of the disabled beneficiary.

These assets will be free from Medicaid recovery liens, since the property in a third party SNT does not belong to the disabled beneficiary

Estate Planning When a Family Member Is Disabled. A first party SNT is set up and funded with assets that do belong to a disabled person, and no other funds can be contributed to this type of trust by any other donors. These are often used when a large settlement following an injury is awarded. In Florida and in other states, first-party SNTs are subject to Medicaid recovery to reimburse the state.

Special needs trusts are complicated trusts and require the knowledge of an experienced attorney who devotes most, if not all, of their practice to SNTs and trust and estate planning.

Reference: The Leadger (May 2, 2019) “Crafting an estate plan to include disabled family members

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Elder Law Estate Planning

What is an Advance Directive and Do I Need One?

“The art of medicine consists of amusing the patient while nature cures the disease.” Voltaire

“Once a patient goes brain dead and relatives sign his organ donation consent form, he will get the best medical treatment of his life. A hospital code blue may be a call for doctors to rush to the bedside of a beating heart cadaver who needs his or her heart defibrillated.” Dick Teresi, The Undead: Organ Harvesting, the Ice-Water Test, Beating Heart Cadavers–How Medicine Is Blurring the Line Between Life and Death.

As an agent appointed by a Health Care Proxy, you will have the right to make the following types of decisions: Choices about medical care, including medical tests, medicine, or surgery. …
These are difficult questions to think about. However, they are very important, as every estate planning attorney knows. Should you ever become unable to speak for yourself, reports the Enid News & Eagle in the article “Veteran Connection: What you should know about advance directives,” there is a way to make a plan, so your wishes are known to another person or persons and by legally conveying them in advance, making sure you have a say, even when you don’t have a voice.

The advance directive helps family members and your doctors understand your wishes about medical care. The wishes you express through these two documents described below, require reflection on values, beliefs, views on medical treatments, quality of life during intense medical care and may even touch on spiritual beliefs. The goal is to prepare so your wishes are followed, when you are no longer able to express them. This can include situations like end-of-life care, the use of a respirator to breathe for you, or who you want to be in the room with you, when you are near death.

It should be noted that an advance directive also includes a mental health component, that extends to making decisions on your behalf when there are mental health issues, not just physical issues.

What is an Advance Directive and Do I Need One? There are three types of documents: a durable power of attorney for health care, a health care proxy and a living will.

The durable power of attorney for health care lets you name a person you trust to make health care decisions when you cannot make them for yourself. This person is called your health care agent and will have the legal right to make these decisions. If you don’t have this in place, your doctor will decide who should speak for you. They may rely on order of relationships: a legal guardian, spouse, adult child, parent, sibling, grandparent, grandchild or a close friend.

A living will is the document that communicates what kind of health care you want, if you become ill and cannot make decisions for yourself. This helps your named person and your doctor make decisions about your care that align with your own wishes. Another very important part of this issue: the conversation with the people who you want to be on hand when these decisions have to be made. Are they willing to serve in this capacity? Can they make the hard decisions, especially if it’s what you wanted and not what they would want? Do you want a spouse to make these decisions on your behalf? Many people do that, but you may have a trusted family member or friend you would prefer, if you feel that your spouse will be too overwhelmed to follow your wishes.

Reference: Enid News & Eagle (March 13, 2019) “Veteran Connection: What you should know about advance directives”

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Elder Law Estate Planning

Can Retirement be Recession-Proof?

Can Retirement be Recession-Proof? It was a tough time for people who had just retired, but since that time stocks have rebounded in a spectacular manner. However, says Money in the article “This is the Best Way to Recession-Proof Your Retirement, According to Experts,” it is possible that the long rally may be coming to an end.

Is there anything that can be done do to protect your retirement accounts from the next financial disaster? Those who are closest to retirement, are always the most vulnerable to drops in the stock market, and those who are retired and drawing down savings are even more at risk. However, you can build a financial buffer to help your retirement funds survive any downturns. No one knows when the next recession or stock slide will occur. There will always be one, so it’s best to be prepared. It’s simply an acknowledgement of the real risks of markets. On average, recessions last about 18 months. What can you do?

Build a cushion. Commit to building an emergency fund. That should be three to six months of expenses. And it doesn’t matter how rock solid or large your retirement investments are. If you take money out prematurely, it’s going to weaken your portfolio.

Pay down all debt, or as much as possible. That is key to feeling fiscally secure, once you leave the workforce. This is because less of your assets are tied up in long-term retirement investments. Tackle the highest interest rate debt first.

It’s far easier to adjust discretionary expenses, than it is to add cash to a stockpile. You can skip a vacation. You can’t skip a mortgage payment. Depending on how close you are to retirement, consider tweaking your investment portfolio. Portfolios can become unbalanced over time, as assets in different classes grow or fund managers change. Review your portfolio to limit your exposure to volatility. Scrub out any unnecessary risk. That may include putting some money in cash or cash equivalents, like savings accounts, CDs and short-term bond funds.

You don’t have to be very conservative on the entire portfolio. People nearing retirement age usually trim some of their stock holdings. It is not now as black and white. You’ll need stock growth to outpace inflation, so your equity allocation must be fine-tuned. Many retirees are working part time jobs to keep some cash coming in and minimize what they take from retirement accounts. If you’re earning enough to live on, you can even avoid taking any distributions, except those that are required. Be aware of how your income impacts your Social Security benefits and taxes, if you have already started to take benefits.

There are other advantages to working part time. It keeps you active and engaged with others, allows your mind to stay sharp and offers the opportunity to socialize with new people.

Finally, make sure your estate plan is in place. You should have a will, power of attorney and healthcare power of attorney. An estate planning attorney can help protect you and your family, regardless of when the next recession arrives.

Reference: Money (March 13, 2019) “This is the Best Way to Recession-Proof Your Retirement, According to Experts”

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Elder Law Estate Planning

How to Help Your Aging Parents Get Financial Benefits

If you notice your aging parent is struggling financially, you probably want to pitch in and help. Of course, doing so will mean that less money is available to pay your bills and save for your retirement. Your loved one’s money troubles could create economic stress for you and your children. It would be wonderful if you could find a pot of gold in the backyard, but we live in the real world. Here are some tips on how to help your aging parents get financial benefits.

The National Council on Aging: How to Help Your Aging Parents Get Financial Benefits

This National Council on Aging created a tool that will search through more than 2,000 federal, state, and private benefits programs across the United States. The search tool can connect your older loved one with assistance that can help pay for housing, medication, food, medical services, utilities, transportation and other necessities.

You can call 888-268-6706 to find a Benefits Enrollment Center in your area. An agency employee can help you at no charge to locate the benefits for which your parent is eligible. After you fill out a questionnaire, you will receive a detailed report listing all those programs and telling you how to apply. You can get application forms and assistance at the Benefits Enrollment Center.

If you prefer, you can do the search yourself online at BenefitsCheckUp.org. This search tool is free and confidential. Once you create the list of programs for which your parent qualifies, you can apply for benefits. Many of the forms are available at the enrollment centers or available online. Some programs require you to contact that entity directly to apply.

How the Benefits Locator Works: How to Help Your Aging Parents Get Financial Benefits

The online questionnaire will ask for information like your parent’s:

  • Date of Birth
  • Income
  • Assets
  • Expenses
  • ZIP Code
  • Prescription Drugs
  • Veteran Status

Your parent must be age 55 or older to use the locator tool. Allow about 15 minutes to complete the online intake form.

Types of Programs for Seniors: How to Help Your Aging Parents Get Financial Benefits

There are many government benefits for older Americans, but do not overlook private groups that assist people in need. Some people do not apply for Social Security retirement benefits, because they did not work for enough years to qualify for full retirement benefits.

Your loved one might qualify through a spouse’s work record or be eligible for partial benefits, based on his own limited work history. A few hundred dollars more a month can make enough of a difference that your parent does not need financial help from you.

Depending on several factors like income, age and geographic area, your older parent might qualify for:

  • Housing through HUD
  • Home repairs or weatherization
  • Transportation
  • Reduced real estate taxes
  • Financial management and budget counseling
  • Groceries through the Supplemental Nutrition Assistance Program (SNAP), the Emergency Food Assistance Program, the Senior Farmers’ Market Nutrition Program, the Commodity Supplemental Food Program and many regional and local food pantries, meal delivery programs for low-income or elderly people.
  • Prescription drugs through Part D Medicare coverage, Medicaid, the federal Low-Income Subsidy (also called Extra Help), drug manufacturers, and charitable groups.
  • Utility bill help, including discounts on heating and cooling bills
  • Monthly cash benefits through the Supplemental Security Income (SSI) for very low-income seniors with few assets.

These are just some examples of the multitude of benefits programs available for seniors.

Every state makes its own regulations, so your state might vary from the general law of this article. Be sure to talk to the Law Office of Frank Bruno, Jr. an elder law attorney in New York.

References
HuffPost. “How to Find Financial Assistance for Elderly Parents.” (accessed October 9, 2019)

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Elder Law Estate Planning

Why Should I Create a Trust If I’m Not Rich?

“Your true assets are the collections of your quality moments on the earth.”
― Amit Ray, Mindfulness Living in the Moment – Living in the Breath

Carve your name on hearts, not tombstones. A legacy is etched into the minds of others and the stories they share about you. —Shannon Adler

It’s probably not high on your list of fun things to do, considering the way in which your assets will be distributed, when you pass away. However, consider the alternative, which could be family battles, unnecessary taxes and an extended probate process. These issues and others can be avoided by creating a trust.

Barron’s recent article, “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich,” explains that there are many types of trusts, but the most frequently used for these purposes is a revocable living trust. This trust allows you—the grantor—to specify exactly how your estate will be distributed to your beneficiaries when you die, and at the same time avoiding probate and stress for your loved ones.

When you speak with an estate planning attorney about setting up a trust, also ask about your will, healthcare directives, a living will and powers of attorney.

Your attorney will have retitle your probatable assets to the trust. This includes brokerage accounts, real estate, jewelry, artwork, and other valuables. Your attorney can add a pour-over will to include any additional assets in the trust. Retirement accounts and insurance policies aren’t involved with probate, because a beneficiary is named.

While you’re still alive, you have control over the trust and can alter it any way you want. You can even revoke it altogether.
A revocable trust doesn’t require an additional tax return or other processing, except for updating it for a major life event or change in your circumstances. The downside is because the trust is part of your estate, it doesn’t give much in terms of tax benefits or asset protection. If that was your focus, you’d use an irrevocable trust. However, once you set up such a trust it can be difficult to change or cancel. The other benefits of a revocable trust are clarity and control— you get to detail exactly how your assets should be distributed. This can help protect the long-term financial interests of your family and avoid unnecessary conflict.

If you have younger children, a trust can also instruct the trustee on the ages and conditions under which they receive all or part of their inheritance. In second marriages and blended families, a trust removes some of the confusion about which assets should go to a surviving spouse versus the children or grandchildren from a previous marriage.

Trusts can have long-term legal, tax and financial implications, so it’s a good idea to work with an experienced estate planning attorney.

Reference: Barron’s (February 23, 2019) “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich

If you ask yourself “should Create a Trust If I’m not Rich?” then these are the answers for you.

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Elder Law Estate Planning Guardianship

What a Durable Power of Attorney Can Do?

“Make sure you visualize what you really want, not what someone else wants for you.” Jerry Gillies

“No one is useless in this world who lightens the burdens of another.” Charles Dickens

Helping aging parents with daily tasks can become a challenge, if the parent has limited mobility. A trip to the bank, for example, will require coordinating the adult child’s responsibilities with the aging parent’s limitations. If the parent has more energy in the morning, for instance, but the adult child is working, this can become a bigger challenge than if the adult child can go to the bank on behalf of the parent, when it’s convenient for them — at a lunch break, for instance.

In this situation, as noted in The Daily Sentinel’s article “Tools to help your aging parent,” having a durable power of attorney will help. This type of power of attorney is a legal document that permits a child or other named individual to handle certain responsibilities, like banking. Granting a power of attorney to a child doesn’t mean giving up total control, which is often a concern of aging parents. It simply means that the child is now legally allowed to handle these tasks.

What a Durable Power of Attorney Can Do? A durable power of attorney is different than the “general medical power of attorney.” As implied by its name, this is limited to making decisions about the parent’s health care and is usually used only when the parent is not able to make these decisions on their own.

There are more serious situations, where neither of these types of power of attorney is enough, such as when the parent lacks capacity because of dementia or a medical decision. It is necessary to protect the parent from themselves or anyone who might try to take advantage of their lack of clear mental capacity. This may require that an adult child needs to be appointed as a guardian for their parent.

Being appointed a guardian can be a very emotional event, since the parent and child are not just switching emotional roles, but legal roles. The parent no longer has the capacity to make significant decisions, because a court has found that they no longer have that ability.

You may have heard the term “conservatorship” used. It is similar to guardianship, except that the conservatorship only allows for control over the parent’s financial affairs.

Guardianship is taken very seriously, as it should be. This removes an adult’s right to make any kind of decision on their own. In some states, including Colorado, the court must first be convinced that the parent is unable to effectively receive or evaluate information or to make or communicate decisions. They must be deemed incapacitated, before guardianship can be established. Once that standard has been met, then guardianship is established. If there is a doubt about incapacity, then no guardianship will be established, and the family is faced with finding other ways to help the aging parent.

What a Durable Power of Attorney Can Do is allow parents and their children to face many issues that are best addressed before incapacity becomes an issue. If the family does not have a plan for the aging parent’s care, it is recommended that the family make an appointment with an estate planning attorney to discuss the various options.

Reference: The Daily Sentinel (March 24, 2019) “Tools to help your aging parent”

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