Couples with young children typically set up revocable trusts with their children’s well being as the top priority. Most trusts plan for the potential scenario where both parents are gone, but at least one child or grandchild remains. A well crafted trust will also specify who a couple’s assets will go to if no children or grandchildren survive them. Some couples will leave assets to charities, and others will simply designate “heirs” as defined by California probate code.
I ask my clients to go one step further and carefully consider all current dependents, including their own mothers and fathers. Think of your estate plan as a plan for today, tomorrow, and ten years from now.
Estate Plans must adequately plan for the possibility that you, your spouse, and potentially your children will be gone tomorrow - or in ten years.
So who do you care for, right now, besides your children? How does your estate plan provide for them?
Many adult children, myself included, provide regular financial assistance to parents or in-laws. This could be in the form of employment, housing, care giving, or direct funds.
Dependent parents can be just as vulnerable - as a dependent child. But while acknowledging that we could die “someday” many of us forget to plan for what happens if we die “tomorrow.” Similarly, some of us fail to fully acknowledge that more people than just our children may be dependent upon us for their financial well being.
Issues and potential disasters such as this are a solid reason to assess your estate plan on a regular basis. Bear in mind that you may not choose to actually change your estate plan to account for the care of elder dependents - or others.
For example, you might consider designating a parent as a contingent beneficiary under a life insurance plan.
Questions to assess your estate plan in relation to aging parents:
Do your parents or elder loved ones have enough savings to pay for skilled nursing facilities or in home care as they age?
Do you provide income, housing, or other financial benefits to your parent(s) or close relative?
Is a parent relying on you to care for them as he or she ages?
And lastly, if you answered in a way that indicates reliance upon you, the child (or similar), what happens to them if you’re gone?
Growing old can be very costly, especially if one should need skilled nursing for months on end. Many of the baby booming generation do not have adequate retirement savings or social security and therefore must rely upon children for supplemental support.
Whether or not to include your parents in your estate plan is a personal decision and if/ how you decided to do so will be unique to your (and your parents) situations.