Aging Parents Planning – Text of Powerpoint

Aging Parents Planning – Text of Powerpoint


By: Martin M. Shenkman, CPA, MBA, JD

Estate and Financial Planning For Aging Parents


Moderator: Martin M. Shenkman


Brian Boak - Singer Nelson Charlmers Insurance

Carol R. Kaufman - CBData® Life Inventory Solutions

Eric Maynard - Ikor of Northern NJ



The information and/or the materials provided as part of this program are intended and provided solely for information and education. Such information and/or materials are not intended nor written by Martin M. Shenkman, P.C., or the presenters for use as the basis of any legal or tax advice and should not be used as independent legal or tax advice.

This presentation is not intended to be an opinion and does not contain a full description of all facts or a complete exposition and analysis of all the relevant tax authorities. Information in this presentation was not intended or prepared to be used, and it cannot be used or relied upon by any party for the purposes of (i) avoiding any penalties that may be imposed on any taxpayer by any governmental authority or agency; (ii) promoting, marketing or recommending to any party any transaction or matter addressed herein; or (iii) making any investment decision.

Estate and Financial Planning

For Aging Parents
Introduction and Overview

Aging Population

Every day since 1/1/11, ten-thousand people a day turn age 65.

By 2030 it is estimated that 1/5th of all Americans will be age 65 or older.

The number of parents requiring the planning to be discussed is significant and growing.

Geographic diversity, children with both spouses working, the breakdown of the nuclear family, and other factors, all make planning more vital then ever to protect an aging parent.


Illness Increases as Parents Age

90% of seniors have at least one chronic disease and 77% have two or more chronic diseases.

120 million Americans are living with chronic illness or disability.

By 2020, about 157 million Americans will be living with chronic illnesses.

50% of those age 85 and older have had some cognitive impairment.

9 million people are cancer survivors with various side effects from treatment


Parent Health Challenges Not Always Easy to Discern

96% of your parents who are living with a chronic illness live with one that is largely invisible. These people do not use any assisting device and may “look” perfectly healthy to the untrained eye.

Many neurological symptoms are hard to see: fatigue, pain, cognitive problems like memory loss or trouble solving problems, weakness, blurred vision, numbness, prickly or tingling sensations, heat sensitivity, dizziness, and bladder problems.

Most elderly parents living with chronic illness do not understand the scope of how much their advisers can do to help them – investigate and communicate what skills and abilities professionals can provide to help parents take advantage of these opportunities.


Helping Elderly Parents and Parents Living with Chronic Illness

Elder law planning and Medicaid planning may be vital for those of more limited means. But many aging parents have significant wealth and need specialized investment, estate and other planning.

People living with chronic illness and disabilities have a wide range of planning issues – no aspect of planning is untouched.

Religious and personal considerations affect all of these matters.

Living wills, health proxies, HIPAA releases and more need to be tailored to each person’s situation, but this is just the beginning.

The Planning Team

Estate and Financial Planning For Aging Parents
Illustration of Impact of Chronic Illness

Parkinson’s Disease: Incidence increases with Age

At age 50: < 10 per 100,000

At age 80: > 200 per 100,000

Average age of diagnosis: 60

Parkinson’s Disease Symptoms


“Pill rolling” Tremor


–slowness of movement

Postural instability

–poor balance

Cognitive Impact of Parkinson’s disease

Incidence of cognitive impairment increases with age.

For the 20% of people with Parkinson’s Disease who go on to develop dementia, there is an average of a 10-15 year delay from time of diagnosis of PD.

Estate and Financial Planning For Aging Parents
Care Managers

What is a Care Manager

Registered Nurse (RN), Social Worker, geriatric or other specialist.

Comprehensively evaluates parent’s physical health and wellness, memory and mental health status, functional abilities, informal and formal social support networks, financial resources and living environment.

Makes recommendations for care based on the information gathered from the assessment, coupled with an understanding of the parent’s wishes.

Professional Organization

In addition to the general license (e.g., RN, Masters in Social Work) another accreditation can be obtained from NAPGCM. Must first have a license (e.g., as a nurse). Examinations, years of practice, etc. are prerequisites.

The NAPGCM designation.

National Association of Professional Geriatric Care Managers this is the organization which the different health related professional.

There is a code of ethics and standards that may provide a greater level of security.

See for more details.

You can identify a care manager in your parent’s location (e.g. by Zip code, etc.).

Inform the Team

Members of the parent’s estate planning team must understand the parent’s current situation and likely disease course, and the personal/family environment – care manager’s in home interviews and skill set are unique.

Example: RN Patient advocates (care managers) have the medical background, but also the interpersonal skills to translate a medical understanding of the parent’s disease course to the non-medical personnel comprising the estate planning team – the perfect intermediary.

Is the caring son really caring or setting elderly and infirm mom up to benefit him over his sister?

Planning can be better tailored to meet the unique needs of the parent with knowledge the social worker is best at gathering and communicating.


Care manager can assist in:

–Obtaining and interpreting letters from the parent’s neurologist or psychiatrist

–Obtaining supporting corroboration

Example: The care manager’s role is helping the parent to see the correct professionals, physicians, neurologists, etc. If a guardianship procedure is called for the care manager would shepherd the parent through the necessary appointments.

–Interpreting the medical terminology

–Documenting parent’s psycho-social status and how it has evolved over time

Example: The care manager’s assessment and charts on the parent will reflect this information. Periodic reports over a long time period will often clearly identify a trend line that can be invaluable in assessing the parent’s status and changes.

Competency (Continued)

–Assessing certain aspects of a parent’s cognitive functioning by administering a Folstein Mini-Mental State Exam (MMSE)

Example: Care manager may administer an MMSE along with SLOMS (St. Louis University Mental Status Exam) which evaluates cognitive decline in individuals with a higher education, and other tests to ascertain cognitive status.

–Evaluating parent’s executive function (e.g., organizational skills, reasoning ability, etc.)

Example: Care manager can evaluate how well the parent functions in the environment, how well they manage their medication, pay bills, are they instrumental in other activities of daily living, etc. Conducting the evaluation in the home enables the care manager to identify issues in the home (e.g. piles of bills, clothes hung in the shower like a closet, etc.) – these are observations an attorney or CPA meeting in the office will not be able to make.

–Analyzing the degree of potential physical, financial or other harm to the parent (Comment to ABA Model Rules of Professional Conduct, Rule 1.14)

Elder Financial Abuse and the Role of the Care Manager

–Often a result of waning competency

–Mandated Reporter (see above)

–Help protect against these risks.

Example: Placing a care giver in the home, or identifying that the care giver is not through a licensed agency so that there is oversight. Implement a plan of a bank, financial or accounting professional to pay bills, etc. Caregiver can identify solicitors calling and attempting to bilk the parent.

–Identify potential gaps in planning and care that may expose parent to financial or other abuse

–Care manager meeting in parent’s home (or wherever parent lives) may identify signs that a meeting in a lawyer’s office will never indicate.

–Distinguish the caregiver, often a family member, from the care manager, a professional retained to help the aging parent as well as perhaps the caregiver.

–Care managers can play a critical role in helping to facilitate the financial, estate and other planning.

–In the vast majority of cases, caregivers will be coping with multiple tasks and often times neglectful of his/her own health and well-being.

–There are unfortunate other instances in which the vulnerable demented parent can be financially exploited by caregivers (family or otherwise) upon whom they are highly dependent which is why early involvement of a professional care manager is often advisable.

Power of Attorney – Illustrative Language

The fiduciary is authorized and directed to make payment for a mandatory independent interview by a licensed care manager (“Evaluator”) in Grantor’s home or other place of temporary or permanent residence, not less frequently then quarterly.

The Evaluator shall be selected in the reasonable discretion of the agent under the Grantor’s health care proxy but shall not have provided other services to the Grantor or Grantor’s family.

The Evaluator shall be required to provide a written summary of the Grantor’s general status addressing the Evaluator’s observations as to Grantor’s physical and psycho-social circumstances, any other relevant observations and recommendations, to the fiduciary, within fifteen (15) days of the interview.

Trust Provisions Integrating Care Manager Input

Revocable living trust with institutional co-trustee is often best protection.

Incorporate periodic review in home by independent care manager and issued to independent institutional trustee.

Report can identify abuse and other problems.

Indications of additional services or steps can be taken.

See earlier example of trust company requiring evaluations.

Few trusts include such a mechanism and those skilled in finance and law don’t have the ability to address these matters.

Even institutions that have in house expertise – the creating and use of an independent patient advocate as a check and balance can be a great safeguard.

Estate and Financial Planning For Aging Parents
Getting Organized

Investment and Financial Information is Critical to Organize

$35-400 billion has escheated to state governments too often because people don’t know what assets are where.

Proper organization can avoid most of this.

People refuse to really address organization because:

–I am organized.

–I don’t have the time.

–It’s overwhelming.

–The kids can worry about it when I’m gone.

Investment and Financial Information is Critical to Organize

Title (ownership) of Accounts:

–Revocable trust



Account Management

–Geographic proximity

–Consolidation and simplification

–Duplicate statements


–Organizing records

–On line payments

–Set up on computer so can enlarge visually/auto-read –Automatic deposits and auto payment

Other Organization - Inventories

–Home inventory

–Life inventory

–Legal document inventory


Estate and Financial Planning For Aging Parents

Investment and Financial Planning

Investment and Financial Decision Making and the Aging Process

What is the current cognitive status, and likely future cognitive impact of aging and/or illness?

–Balance maintaining a parent’s independence versus protecting the parent.

–Some conditions, like Alzheimer’s disease, assuredly result in cognitive impairment, others like COPD generally do not.

–Where dementia is likely to occur, the focus should be on creating substitute decision making mechanisms in advance.

–Parent aging/health challenges may impede physical ability to manage finances, not necessarily cognitive ability, so focus may be on minimizing effort, not decision making.

–Some do both – so the focus may need to address both issues.

Aging and health challenges may disempower the parent – planning should empower the parent.

Cash Flow and Budgeting

Budget is the core of every financial plan.

Financial plan is the core of every estate plan.

Standard assumptions may not suffice (e.g. inflation of medical costs, expense patterns may differ; etc.).

May need to target cash flow for specific milestones that differ from others: relocating, modifying home, etc.

Cash sources:

–Distributions from retirement accounts

–Borrowing from retirement or other accounts


–Home equity


–Home accessibility




Investment Planning for Aging parent and parent with Chronic Illness

Tailor an investment plan in light of the parent’s specific circumstances, not generalizations or assumptions

Understand aging process for the particular parent and if applicable disease trajectory and its impact on expenditures, life expectancy and other factors.

Each parent’s experience is unique to that parent.

A parent can have varying experiences over time.

Other Investment Considerations

Liquidity: Investors of advanced age, and/or living with chronic illness, might need or just prefer more liquidity to meet expenses.

Barbell asset allocation concept

Asset allocation: May need more aggressive allocation to equities and alternatives to create sufficient wealth to address health or other anticipated expenditures.

Needs Analysis: Consider an independent evaluation that addresses medical and care costs, disease projection.

Meetings: Annual meetings are vital to document a pattern of investment planning and keep abreast of health and other developments.

IPS: Power of attorney and/or revocable trust – who will be signing the IPS.

Estate and Financial Planning For Aging Parents
Income Tax Planning

Income Tax: Insurance

Disability insurance payments are income tax free if paid personally – did parent pay premiums from business.

Long term care insurance payments are generally treated as payments from accident and health insurance and are tax free (except for dividends).

Life Insurance accelerated death benefits under a life insurance contract, or viatical settlement before the insured's death, are generally tax free if parent is terminally or chronically ill. Definition of “chronically ill” is so extreme as to exclude most people: (1) Unable to perform (without substantial help) at least 2 activities of daily living (eating, toileting, transferring, bathing, dressing, and continence) for a period of 90 days or more due to loss of functional capacity; or requires substantial supervision to protect from threats to health and safety due to severe cognitive impairment.

Income Tax: Home Modifications

Medical expense deduction may be allowed for special equipment and home improvements if the main purpose is medical care: adding an accessible entrance ramp, installing a lift, widening doorways, building handrails, modifying cabinets, etc.

Cannot deduct your expenditures to the extent of any increase in the value of your home.

Have house appraised before and after the improvements.

Consider impact on provisions in power, living trust, etc.

Income Tax: Medical Expenses

Take affirmative steps to enhance the likelihood that certain expenditures will qualify as deductible medical expenses.

How can the parent corroborate that an otherwise personal expense is for medical care?

What is motive and purpose for incurring the expense?

Has a physician recommended the item or expense to treat a diagnosed medical condition -- Has this been confirmed in writing?

Can the taxpayer establish that the item would not have been bought but for the disease or illness? IRC Sec. 213(d); INFO 2009-0209

Estate and Financial Planning For Aging Parents
Insurance Planning

Life Insurance Considerations

–Evaluation of existing policies and options

–Accelerated death benefit option

–Borrowing against cash value to meet urgent needs

–Viatical Settlements

–Sale of policy versus surrender for cash surrender value

Property and Casualty Insurance

–Does coverage have to be updated to protect home, equipment, health aides, etc.?

–Liability limits to reflect possible risks (e.g., do health or aging challenges increase the likelihood of an accident).

–Scheduled property adjustments for life changes

–Is the appropriate property is covered? (e.g. aging parents may have sold or given away a vacation home, or perhaps bought a weekend home)

–Automatic payment (e.g. debit to checking account to avoid lapses) and value increase provisions

Long Term Care Insurance

–Is it still feasible to obtain coverage?

–What does existing coverage provide?

–How does coverage affect budgeting and other planning?

–Review of policy reporting and other requirements; ascertaining benefits that will be obtained and revising the financial plan to reflect them.

–Evaluate long term care for care giver spouse/partner.

–40 to 70% of caregivers have clinically significant symptoms of depression.

–One in ten (11%) caregivers report that care giving has caused their physical health to get worse.


Estate and Financial Planning For Aging Parents
Competency and Cognitive Issues

Competency – Differentiate Dementing Conditions

Most chronic illnesses are not associated with progressive cognitive loss (e.g. chronic congestive heart failure, diabetes, progressive osteoarthritis etc. Such parents may have significant need for planning to address progressive functional impairments.

With Alzheimer's and other dementia related conditions, decision making capacity will be lost – this is quite different from many other chronically physically ill individuals would not be expected to lose her decision-making ability.

An individual who appears to be physically handicapped should NOT be assumed to be mentally incapacitated, regardless of the extent of apparent physical impairment – Consider the image of Steven Hawkins whose brilliance sharply contrasted with his physical condition.

Unlike cerebral palsy however (as an example of neurologic impairment), Alzheimer's disease will invariably include some phase of illness in which the insight, judgment, awareness, short-term memory, and attentiveness all become impaired.

The goal for planning is to recognize these eventualities before hand with the proactive involvement of care managers and concerned legal professionals.

Thinking, Memory and Cognitive Issues

–Varies significantly by disease and even within the population of a particular disease.

–Even if many people with a particular disease experience cognitive impact, the degree may vary.

–Long term memory may not be affected, but short term may.

–Slowed information processing doesn't mean lack of understanding.

–Executive functions (planning, prioritizing, etc.) may be impacted.

–Word finding difficulties

–Cognitive fatigue

Impact of Aging and Illnesses Varies

Aging impact on cognitive ability is variable.

There is much commonality in the potential for functional impairments from the progressive but highly variable course of multiple sclerosis and Alzheimer's or Parkinson's disease.

But the inevitability of cognitive issues that exist with Alzheimer's disease are generally not represented in neurological conditions like MS or PD.

The best approach is to emphasize the need to individualize for each particular parent.

Cognitive Impairment - Alzheimer’s

Alzheimer's disease is being diagnosed earlier and earlier in the course of illness as a result of greater awareness in the general public about its high prevalence as well as improved awareness in the medical community to be alert for symptoms attributable to dementia.

In some instances, the diagnosis is made even before the condition has significant functional impact -- This very early stage of Alzheimer's, sometimes termed mild cognitive impairment or pre-dementia, is established when neuropsychological testing confirms a subtle but definite impairment of intellectual functioning that has not yet impacted activities of daily living or caused behavioral changes.

Individuals with cognitive impairment directly leads to impairment of activities of daily living

Example: The affected individual is no longer able to make change while doing her grocery shopping

Example: The affected individual repeatedly gets lost when trying to drive.

Alzheimer’s Ancillary Issues Significant

Apathy is a significant issue for many.

It is also important to note that frustration with the cognitive difficulties experienced by an Alzheimer's parent can also give rise to more problematic behaviors such as aggression, delusions and paranoia, frequently directed against caregivers.

Such behaviors, when coupled with later functional impairments such as difficulty controlling bowel and bladder functions, often lead to institutionalization in the middle or latter stages of the condition.

Secondary Issues


Sandy Smith has very early stages of Alzheimer’s.

As time progresses, Sandy’s increasing lack of self-insight has begun to impair her care

Her nutrition begins to suffer and she experiences weight loss when she was no longer able to cook for herself because of her dementia.

The cascade effect can grow and increase the overall risk to Sandy.

Periodic home interviews by a care manager can identify and address these issues before they have a significant adverse impact.

Assessing Competency

Medical documentation

–Internist or primary care physician letter concerning general health issues and medications

–Report or letter from psychologist or neurologist or both

–Care manager/RN patient advocate review and report

–Corroborating ancillary evidence

–Legal decision for attorney

–Attorney’s assessment during meetings

Different Levels of Competency

Testamentary capacity is the lowest.

Contractual capacity is higher.

How does applicable state law classify a power of attorney or other document – does it require testamentary or contractual capacity?

Situationally specific:


–Degree of harm

–Natural or unnatural

–Historical pattern

Consider availability of formal forensic assessment either through a geriatrician, geriatric psychiatrist or appropriately change psychologist.

In high risk situations (e.g., non-”normal” will distribution, endeavor to establish as certain as possible the capacity of the parent.

Future Impact on Competency

–What is the likely future trajectory of parent’s illness?

–How to plan now to address future changes.

–What is disease course likely to be?

–Can changes be monitored periodically so adjustments can be made?

–New drug therapies may change the prognosis.

Estate and Financial Planning For Aging Parents

HIPAA Releases

HIPAA Releases Generally

HIPAA = acronym for the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191, 110 Stat. 1936 (1966)); 45 C.F.R. Sec. 164 (2002). HIPAA, as amended (GINA too) Maintaining the confidentiality of PHI means protecting info from being made available or being disclosed to unauthorized persons.

If you’re ill, can your daughter-in-law the doctor get to see your parent chart to monitor your care?

If you’re a successor trustee, and the current trustee is forgetting to pay insurance premiums and respond to correspondence, can you replace her?

Your partner is disabled and you need to take over the professional practice, how can you obtain the requisite physician letter mandated in your shareholders’ agreement to demonstrate his incompetence to be able to trigger the replacement provision?

Be cautious of the “standard” form.

Release Contents

–Writing: Authorization should be in writing and should acknowledge that its being made voluntarily.

–What: Describe the health information to be disclosed. This could be the entire medical record, or only specified components. Could specify that only medical records between certain dates be released. The HIPAA paradigm is that only as much info should be disclosed as necessary

–Who: Which medical provider should make the disclosure? This could be a specific physician or hospital or a list of providers. A broader approach could be used to indicate a category of providers. For example, “any physicians, hospitals or other medical providers who have provided treatment, other medical services or payment for same, from June 1, 2004 through and including the date of this Authorization.”

Release Contents

–Term: When does the authorization to disclose PHI expire? This could be: “upon a child attaining age 21.” It could be “2 years from the signing of this authorization.” “Upon the conclusion of my court case” may suffice for a litigation matter, although issues of appeals, etc. might warrant consideration in setting the parameters. “One year from death”.

–Revocation: A statement that you retain the right to revoke any authorization to disclose your PHI. Any revocation, however, is not binding on a medical provider until they receive it. This minimizes the issue of their liability for disclosing information based on an authorization they held prior to the revocation.

–Re-Disclosure: The release may state that certain information, such as HIV testing results, cannot be disclosed by the person receiving it. However, the release should also acknowledge that once other information is disclosed, it may thereafter be re-disclosed by the person receiving it without the HIPAA safeguards.

Release Contents

–Purpose: The purpose for the disclosure should be explained. This might be limited to the minimum information to determine whether you have the ability to function as a trustee or should be replaced, or only that information necessary to underwrite you for life insurance.

–Signer: If you are signing the authorization, the signature line should merely state that you are the parent. If, however, another person is signing for you, the authorization should state that that person qualifies as your personal representative, and that they have authority to make health care decisions for you.

Estate and Financial Planning For Aging Parents


Chronic Illness: General Estate Planning Impact

Aging and Disease Disempower

Planning Should Empower.

Uncertainty of the impact of the aging process and chronic illnesses, planning should provide the parent maximum control over her financial and legal affairs, while creating an appropriate safety net in the event cognitive or other impairments becomes significant.

Most “standard” forms and planning do not address these issues.

Powers of Attorney for an Aging Parent

Why standard drafting may not suffice – how much control should be given up now.

Springing vs. not; General vs. Special -- when to use each.

The problems of triggering a springing power are common to all parents. If a parent is insistent on a springing power, even a parent with a chronic illness, the power may only have to be triggered once, when the level of incapacity reaches a point where an agent has to permanently take over – what about a parent with relapses.

Compensation of agent – most powers ignore but agent may act for years or decades; consider quick action for short duration during an attack.

COPD – stress can trigger an attack and hospitalization resulting in permanent damage – coordinating finances and arranging for appropriate assistance can mitigate.

Living Wills and Chronic Illness

Religious and personal Preferences: Be certain to address. Standard forms will not.

Disease Modifications: Modifying documents to address specific health issues – what disease does the parent have, at what stage and with what anticipated disease course – how if at all should these matters be reflected.

Experimental Treatment: Specification to provide non-proven experimental treatment is a common modification -- must agent under power of attorney fund this.

–Tissue Donations: Since Alzheimer’s disease (AD) can only be confirmed 100% through a brain autopsy, many suffering with AD will wish to include a specific consent in their living will directing that a brain autopsy be permitted and their brain be donated to promote scientific research into AD. Religious issues should be addressed.

Health Proxies and Chronic Illness

Agent Selection: Ability to handle, understanding of disease course, etc.

Residence: Powers to grant to move to new state for different laws. Will this suffice?

Guardianship: Alzheimer’s disease: Given the progressive nature of AD and the certainty of cognitive issues, a guardianship designation should be included in the health care proxy (or a separate guardian designation prepared). Some state laws expressly permit this.

Living Wills, Health Proxy – New Trend

The current trend in living wills and health care proxy is "POLST" (physician orders for life-sustaining treatment) or "MOLST" (in New York state medical orders for life-sustaining treatment).

These legislative initiatives are essentially the next generation of living wills, and insure an individual’s wishes as they relate to resuscitation, artificial means of hydration and nutrition, invasive medical technologies, or other individual medical wishes are both known and honored across all health care settings.

Goal is to lead to more rational decision-making about often futile and burdensome medical interventions at the end of life.

Revocable Trust and Aging/Illness

Revocable living trusts are nearly ubiquitous in estate planning.

Typical use is to minimize ancillary probate, or avoid probate entirely.

Indispensable technique to provide a protective financial and personal shield for the large and growing number of parents facing the challenges of aging, chronic illness, and/or disability.

What provisions should the trust contain to address the parent’s health status.

Revocable Trust and the Aging Parent

Who should be the trustee?

–With advanced Alzheimer’s disease or Bipolar disorder, the parent perhaps should not be a trustee at all.

–With earlier stages of Parkinson’s the parent may be the sole trustee.

–Some parents may best be served by a hybrid approach.

–Naming a parent living with MS as a sole trustee may prove problematic during an exacerbation, the severity of which can’t be predicted. Not naming the parent as trustee cedes control from a parent who generally has the capacity to make decisions.

–Consider having the MS/COPD parent and another person as co-trustees from inception, with either being granted authority to act independently to take the actions that might be required during periods of an MS exacerbation, or a 30 day disability period for removal.

Even when assistance with daily activities is required, the impact of aging and/or chronic illness on some parents is such that the parent may be able to, and want to, serve as a co-fiduciary.

Administrative burdens can be shared while keeping the parent involved and in control. This is preferable when feasible, rather than eliminating the parent’s involvement as may be the case with, for example, a more advanced stage of Alzheimer’s disease.

Distribution and Related Provisions 1

Express wishes relating to their health challenges that should be incorporated into the revocable trust as binding directives or as precatory language depending on the circumstances and relationship to the trustees.


–A house may be a refuge and sanctuary from a world that is far less accommodating than most of us think -- The home may reflect years of renovations to make it as accessible, comfortable and safe as possible. For these parents an express directive to retain the home and facilitate the parent’s continuing to reside in the home.

Distribution and Related Provisions 2


–Authorize charitable gifts to an organization combating the parent’s disease, perhaps to fund research to find a cure of the disease they struggle with.


–Mandate that a care manager create a care plan for the parent that can be incorporated into the parent’s budget and financial plan, so that the appropriateness of payments, expenses, and gifts can be determined.

–Using standard budget assumptions may dangerously underestimate costs.

–Also, the impact of the parent’s health challenges on longevity should be considered.

Distribution and Related Provisions 3

Parents living with a particular illness might be willing to accept a level of medical risk in pursuing a cure, or even just relief, that others who have not experienced their pain and struggles may not understand.

Consider authorizing, or even mandating expenditures to support certain lifestyle choices (e.g., religious affiliation, etc.).

Distribution/expenditure provisions in living wills and health proxies should expressly permit payment by the trustee for experimental treatments, depending on the parent’s wishes.

Trustee/Fiduciary Compensation

The compensation for trustees, other fiduciaries and monitors may need to be tailored to address the unique demands the parent’s aging and/or illness might create for them.

If multiple children are involved, compensation may be a vital but sensitive issue if one is shouldering most of the burdens.

Monitor Relationships

Protect against financial or physical abuse.

Several types of monitor relationships can be created.

A trust protector or even independent accountant, can be designated to receive and review monthly brokerage and bank statements to provide a check and balance on the trustees.

The trust can authorize, or if appropriate, mandate, that the trustee retain an independent, licensed, care manager to periodically meet with the parent/grantor, conduct an interview and evaluation in the home or facility where the parent resides, and issue a written report to the trustees and perhaps others. This can provide objective and professional assessment of the parent’s status, identify any abuse or other issues that should be address, and revise the existing care plan to reflect any new developments.

Estate and Financial Planning For Aging Parents
Charitable Planning

Charitable Planning and Chronic Illness

Tailor charitable planning to coordinate with the needs and personal objectives of the chronically ill parent or the parent’s chronically ill loved one.

CGAs – Charitable Gift Annuities

–Watch % of assets committed.

–Weigh charitable help (50% backend) versus financial needs.

Creative uses of CRTs to address chronic illness

–Charitable bail out of closely held business which will have to be sold as disease progresses.

–Management, certainty, cash flow

CLTs – time not just to zero out but to end when the chronically ill child will be in financial need.

Estate and Financial Planning For Aging Parents

This affects many of your parents, so addressing the implications of chronic illness is not only the compassionate thing to do, it’s good business.

Don’t make assumptions, you don’t have to be an expert – Ask questions.

Standard documents and planning will often not protect the aging parent or the chronically ill parent.

Understand the specific impact on the specific person and what it means to their planning and to the planning of their loved ones.

Don’t be uncomfortable to ask detailed and personal questions.

Not addressing the tough and personal issues may assure the parent is not protected.

Be creative, often a little “tweak” to a standard planning technique can work wonderfully to help.

Empathy (understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another), not sympathy is the attitude that will facilitate planning.

Resources -- see the “chronic illness resources tab” sections on estate and probate planning, and chronic illness, has podcasts, articles, and sample forms

Carol Kaufman, CBData® Life Inventory Solutions. 201-447-1577.

Brian Boak, Singer Nelson Charlmers Insurance. 201-837-1100.

Eric Maynard, Ikor Patient Advocates and Professional Guardians. (888) 501-4567 x741.

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