As your parents age, they begin to become more dependent on their children. Elderly parents may need help with various tasks, including financial and medical issues. In order to be able to take care of various matters, you will need legal authority. It is best to understand and review the documents you need ahead of time with your parents. There are some essential legal documents that will make it easier for you to handle their needs when the time comes. Documents that you may need include those that are related to finances, health, and the estate.
Last Will and Testament
A last will and testament is a legal document that provides directions for the distribution of your property and assets after your death. A will is helpful because it gives you information about how your parents wanted to divide their property when they pass away. The will names beneficiaries so you will understand how your parents wished to provide for their loved ones. It can reduce disagreements between beneficiaries and give the family clear guidelines to follow.
Power of Attorney
A power of attorney gives you the legal authority to manage the finances of your loved one on their behalf. The power of attorney is helpful because, without it, you may face difficulties trying to have access to your parents’ finances to handle their needs. You may need to take over the finances of your parents while they are in the hospital or unable to do so on their own. Depending on how the document is drafted, you may be able to make payments such as mortgage or rent, pay bills, handle tax matters, and even sell property when needed. Some powers, like making gifts or changing beneficiaries on accounts, require specific authorization in the document, so the POA should be drafted carefully to meet your family’s needs.
Healthcare Directive
A healthcare directive is a document that defines the medical care wishes of a person. The document is helpful in that it tells you how your parents would like to handle their healthcare under various circumstances. This can take a lot of emotional burden off family members during a time of great stress when a parent is ill. The directive gives direction in the event that your parent is incapacitated or unable to make decisions. In Wisconsin, a healthcare directive is sometimes called a “Declaration to Physicians” or “Living Will.” It is a separate document from a Health Care Power of Attorney (described below).
Healthcare Power of Attorney
A healthcare power of attorney gives you the legal right to make decisions regarding the health of your loved one. Under Wisconsin law, a Health Care Power of Attorney generally becomes effective once two physicians (or a physician and a licensed psychologist) certify in writing that the principal is incapacitated. In addition, a HIPAA release gives you access to your parent’s health records and the ability to speak to doctors and other medical professionals about your loved one’s health condition and treatment.
Living Trust
A living trust is an arrangement that holds your parent’s property or estate before it gets distributed or transferred to beneficiaries. Your parents will designate property that will specifically be held in trust. Not all property needs to be in the trust. With a revocable living trust, the person who creates the trust (the grantor) typically serves as the initial trustee while he or she is alive, retaining full control over the property. After death, the property and assets in the trust can be distributed to the beneficiaries. A benefit of a trust is that it may allow you to avoid probate after the death of your loved one.
Marital Property Agreement
Wisconsin is a marital property state. For married couples, a Marital Property Agreement can clarify how property is classified between spouses and can be an important tool for estate planning, tax planning, and ensuring assets pass according to your parents’ wishes.
It is important to speak to your parents about these documents before they become necessary. With these documents in place, you can effectively take over for your loved ones when the time comes. To learn more about estate planning, contact our experienced attorneys at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online to schedule a consultation.