Protecting Elderly Parents Assets – Do You Know the Answers to these Questions

protecting elderly parents assets

Protecting elderly parent’s assets begins with proper planning. Many families with aging parents are unaware of how venerable their life savings really are. And how are you supposed to know everything… you only age once. In this post, we talk about why your parent’s hard earned money is at risk and strategies for protecting elderly parent’s assets.

Sometimes Parents Know Best But You Can Help Too

Chances are you’re reading this to help your parents out. Maybe they are not the best planners or (like most of us) they don’t keep up with laws surrounding long-term care and asset recovery. The good news is you can learn and start a conversation with them about protecting themselves in this last phase of life.

Don’t Let Them Repeat Other’s Mistakes

The truth is, most seniors underestimate the amount of years they will require assistance and the cost of said assistance. Nearly 70% of seniors will require long term care. The average term for this care is 3 years, however, one in five seniors will need this level of care for 5 years. Now are you starting to see why it’s important to plan to avoid draining everything they worked for?

Yes, there are government programs in place to assist with this type of care but they come with strings attached. We’ve seen too many people go about handling everything from arranging assets to long term care preparation in the wrong way… and it typically leads to a headache.

Questions to Ask Your Senior Parents

  • Do you have a will or a trust in place?

There are several differences in how assets are handled if an individual has a will in place, a trust in place or neither. In the event your parent passes away suddenly, even with a will in place, their assets can be stuck in probate anywhere from nine months to two years. With a trust, a trustee handles affairs without court interference. If a parent is incapacitated, with a will, the court oversees financial affairs. Much like a trust at death, at incapacity a trustee will oversee affairs according to your parent’s instructions.

  • Have they assigned a health and/or financial power of attorney?

In the event of incapacity, without these assigned you will not be able to make financial and health decisions on their behalf. The duty falls to the court where their assets will be under their supervision until they decide who is best for your family. Not the greatest way to help preserve elderly parents assets.

  • Did they create a life estate?

This kind of estate is an important tool for protecting your paren’ts home once they pass away. They remain the primary owner and assume all responsibilities of homeownership until their death. After, the home is passed immediately to an assigned co-owner. Without this protection in place, the house may be seized to pay back long-term care benefits provided by the state.

  • Are annuities Medicaid complaint?

Protecting senior parent’s assets also hinges on setting up the proper annuities. There are specific annuities that will still allow individuals to receive benefits. It important that your parents speak with a senior planning advisor as opposed to a financial advisor.

  • Have they gifted up to $14,000 in cash?

Most senior parents plan to leave cash to children or grandchildren. Rather than having that cash available for Medicaid to count, they can give and early gift so your parent’s wishes are actually honored.

  • Have they talked with a senior planning or elder law specialist yet?

Whether you’ve been researching how to protect your senior parent’s assets for some time or this is your first article, the language involved in elder law and senior planning is complex. When the time comes to make changes, it’s important to meet with the right personnel to ensure you parents haven’t missed anything.

With the right questions, you can help with preparing and protecting your parent’s assets.

For more information: Contact Senior Care of Michigan below to speak with a Senior Planning Expert.

protecting elderly parents assets

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