Unfortunately, a lot of it requires the services of an attorney.
While there’s a definite cost to hiring a lawyer to advise you and your parents about legal issues, there can be an even bigger cost to not doing it. What’s the phrase? Penny wise, pound foolish?
You’ll find right away that there are two main kinds of lawyers who work with the elderly. The distinctions are important.
Elder law attorneys
Elder law attorneys help people plan for the kinds of issues that come up when people become incapacitated. The basic focus is on figuring out the person’s needs during their lifetime and deciding how to plan and pay for it. They help you maximize your income and assets so you can live the lifestyle you want to live. They know a lot about the benefits available to seniors in each state.
Estate planning attorneys
Estate planning attorneys help people pass on wealth from one generation to the next. Of course, part of this is making sure there’s enough money to support the person during their lifetime. Most of the time estate planning is used by families who are vulnerable to the estate tax (this means they have over $3.5M in assets), but they can also be helpful to families with less.
By the way, if your parents are in that lucky group with over $3.5M in assets, run — don’t walk — to a competent estate planning attorney or financial planner who specializes in using charitable contributions to avoid estate taxes. In many cases you can eliminate your entire estate tax liability with careful planning. What this means is that you can support charities you love with millions of dollars of donations and still give you children more than you would have been able to do if you hadn’t planned.
Read that sentence again. It’s true.