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What Happens If You Die Before Your Elderly Parents?

By Stan Corey February 27, 2020 Mindset

Many Baby Boomers have parents living into their 80s and 90s, and often these elderly individuals are in need of support from family as they have limited resources. They may depend mainly upon Social Security with Medicare benefits or maybe they are fortunate enough to have some form of a pension.

In many other instances, one parent has passed away and has used up a good deal of the couple’s resources for their own care. The situation becomes more critical if you are the only one left standing to take care of the parent!

Continued Care Plans

What plans have you made for the continued care of a parent in the event of your own death?

If you are taking care of a parent, you are likely familiar with their financial picture and have been paying bills and been the contact person for the care facility.

You may already be providing some amount of subsidy for their care and may have concerns about how this impacts your own retirement financial wellness. A key to being able to continue the level of care is to have an understanding of both your parent’s finances as well as your own.

Here are some basic steps to consider taking to assure that if you were to die before your parent, you would not leave them at the mercy of the Family Law Courts or force them into a Medicaid facility that may not be at the same level of care you intended.

Review Your Parent’s Documents

First, review your parent’s estate documents and be sure that they have a Financial Power of Attorney (POA), Medical POA (Med Directive), a Living Will (to indicate their wishes concerning end-of-life care), and that the appropriate successors are listed in these documents in the event of your death before your parent’s.

Be sure that these documents are up to date so that you will be able to utilize them with the various financial institutions and the medical facilities that may be employed for your parent’s care. (Documents more than five years old may become a practical issue in dealing with institutions).

If your parent is already in a full care or memory care facility, check to see if they require a “Do Not Resuscitate,” or DNR. If Hospice care is necessary, they will require a DNR.

Review Your Own Documents

This may be a good time to also review your own estate documents. When was the last time you reviewed your Will, Revocable Trust, POA, Med Dir, and Living Will?

Have they been updated since your parents or parent entered a care facility? Do you have provisions for their continued care via your own estate in the event you predecease them?

Look into the Financial Side

Next, it is also time to review your parent’s and your own financial circumstances in order to gain an understanding of the amount of resources available to parents and what, if any, financial responsibilities you may have.

These may not necessarily be legal responsibilities but may be based more on emotions and your own fears of being held in a long-term care facility that does not meet the level of what you would want for yourself.

This situation also creates potential dilemmas if you have a surviving husband, children, and possibly grandchildren. How will providing aid to a parent impact the long-term resources for your own family?

In retirement, individuals form new routines, and many people may not pay as much attention to finances as the income is a constant and life just seems to flow.

Financial planning is primarily focused on the goal of getting to retirement, but many plans do not really discuss the necessary planning when you are in retirement. Retirees tend to go along with the flow and don’t make changes until an event causes them to do so.

This is reactionary planning and can lead to unfortunate situations. Retirement is just another stage in the planning process and not the end of planning. In retirement, simplicity is a great start, so keep only those accounts you need especially for direct deposits.

Social Security does not recognize a POA, so make sure you take the time now to deal online with Social Security for your parent!

Time for a Family Meeting!

How often do you and your spouse review your overall financial picture? Which spouse is the primary “money manager”? If something was to happen to that person, would that leave the survivor in a lurch?

Who should the survivor contact for help? Are your children aware of what you want in the event of your own incapacity or death?

These issues are challenging and can cause anxiety for all concerned. You may not realize it, but your children are already worried about what will happen to you and are concerned about your wellbeing, both physical and financial. Would having a family meeting help to alleviate everyone’s concerns? \

This would also be a good time to make sure the person(s) you want to handle your own estate matters is actually willing and able to do so.

Having this type of meeting may also reduce the potential family in-fighting that may occur, especially if you have chosen someone who may be controversial or has conflicts with other family members.

If you have a blended family, having an open and honest meeting may provide the clarity needed so that beneficiaries from both sides do not create battle lines that may cause permanent damage to family relationships.

The sooner these matters are addressed, the easier it will be when the time comes to implement your long-term planning and estate distribution plans. Please seek professional guidance from Elder Law or Estate Tax Law attorneys for your estate planning requirements.

Disclosure: The information provided in this article is for informational purposes only and not to be considered legal, financial or tax advice.

What provisions have you made for your elderly parents’ care? Have you looked into financial planning options? What issues have you not thought about? Please share your thought and concerns below.

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The Author

Stan Corey is a retired Certified Financial Planner Professional, Chartered Financial Consultant, and Certified Private Wealth Advisor and has worked with many individuals, families, and small businesses for almost 40 years. He has published two books, The Divorce Dance and When Work Becomes Optional. His current project is a series of short stories for children about life on the water, called “Sailing Adventures of Mac Brown.”

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