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The AARP Poll Have you discussed with your loved ones who will make health care decisions when they are unable to do so themselves?

Legal Issues: Protections You Should Know About

All too many elderly people suffer the financial battering of con artists. Jane’s father, for instance, was scammed by a day laborer who showed up at his door. The man talked him into removing a small, “diseased” cherry tree in his front yard, and then presented him with a bill for $4,000.

“We were able to stop payment on the check only because my brother happened to drop by my dad’s house and saw the devastation in the front yard,” says Jane. "The tree guy sued my dad for the $4,000. My brother, who is a lawyer, ended up in a courtroom fighting for my dad’s money. But we had to spend $2,000 to keep from paying out the $4,000 to the tree guy.”

Adapted from Caring for Your Parents

Having control over issues involving fraud, as well as health care and financial decisions, is something most older people probably took for granted when they were younger. As they age, however, they may become unable to exercise the same control. That is why it becomes increasingly important for you to help your loved ones take the proper legal precautions.

Through a variety of legal documents, older people can take control of their health care and financial decisions and establish their preferences now for the their peace of mind and that of their adult children. It’s also much easier to speak about these issues before there is a crisis.

In fact, the demand for such protections is growing. Many attorneys specialize in elderlaw issues such as the following:

  • Estate planning
  • Long-term care
  • Retirement issues such as pensions
  • Health care issues such as Medicare/Medicaid and insurance disputes
  • Fraud and abuse
  • Housing issues such as home equity conversion and reverse mortgages
  • Age discrimination
  • Plans for possible incapacity
. . . Older people can take control of their health care and financial decisions and establish their preferences now for the their peace of mind and that of their adult children.
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Legal Protections While each family’s situation is unique, here are some of the legal steps and products parents and their adult children may want to consider:

  • Advance directives for health care This general term describes a variety of documents about your health care wishes. They may be called a Living Will, Health Care Directive, Health Care Proxy, Health Care Power of Attorney, Durable Power of Attorney for Health Care Decisions, or other similar names.
  • Will This document instructs how people want their property to pass on after they die. Probate occurs in the parent’s city or county of residence. It is a key process by which some types of property is legally transferred from an estate to the will's beneficiaries. It may take six months to several years to complete, during which time the estate pays related taxes and fees. Many parents and children prefer to avoid probate to keep details of the estate private and reduce or eliminate taxes. Several strategies make this possible including trusts, joint tenancies with right of survivorship, and life insurance payable directly to beneficiaries.
  • Revocable living trusts Like a will, this written document lets parents direct how their property will transfer after their death. It also lets them choose a person to transfer the assets. Unlike a will, however, trust property goes immediately to the beneficiaries without probate. Trusts also differ from wills in that they take effect during the parent’s lifetime, when he or she transfers ownership of property to the trust. Lawyers charge more to write living trusts than wills, but other costs, such as the cost of probating a will or funding a trust, also need to be included in a comparison.
  • Bank account access Parents may make an adult child a joint owner of their bank and other accounts so that he or she will act for them in an emergency. They can also appoint someone as joint renter, deputy, or agent for their safe deposit box.
  • Durable power of attorney for finances (DPA) This document allows you to give another person the authority to make financial decisions on your behalf. Without a DPA, the court must appoint a spouse, close relative, or companion to manage the person’s financial affairs. Typically, a DPA goes into effect as soon as you sign it or, if you specify, when a doctor certifies that you have become unable to make decisions.
  • Health care power of attorney (HCPA) This special kind of durable power of attorney lets you give another person the power to be your advocate and make decisions regarding your medical treatment. It becomes effective only if you are temporarily or permanently unable to make your own decisions.
  • Living will More limited than the health care power of attorney, this document directs the doctor to withhold or withdraw life-sustaining treatment should a patient be diagnosed with a terminal condition and unable to state his or her preferences. Many legal experts feel that a living will is necessary even when parents have created a power of attorney. Adding this document helps guide the child or other agent in making difficult decisions. Perhaps more important, it improves the likelihood that the doctor will follow the parent’s wishes.
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Helping Parents Take Action What can you do to help your parents address these important legal issues? Here’s how to get started:

  • Discuss the legal protections described above with your parents. Find out if they have or want these documents. If they’re unfamiliar with the products, you may want to gather more information to help them decide what they need.
  • Find a good lawyer if your parents don’t have one who can handle estate planning and elderlaw issues. Given the wide variety in what attorneys charge, it makes sense to shop around. You may be able to find free or reduced-cost legal help, which may be available through a government agency, AARP Legal Services Network, or other groups. Cost should not be your only standard. Be sure to ask if the attorney provides a free initial consultation. How much experience does he or she have in the issues you care about? Can you get references? Will just the attorney or others in the firm work on the documents? What will the fees and expenses total? When can the attorney meet with you?
  • Talk to your parents about financial protection measures. Know where to find personal and financial documents in an emergency. Ask companies to notify you if parents miss bill payments. Suggest parents switch to direct deposit for Social Security and other benefit checks. Share financial information and responsibilities with family members, especially caregivers.
  • Help your parents work through sensitive issues, such as who they want to make financial or medical decisions on their behalf. What do they want done with their property after their death? Are there any life-sustaining treatments they would or would not want if they reach a terminal condition? If they had a choice, where would they want to die?
  • Help parents take steps to increase the likelihood their advance directives will be followed. Talk with the doctor before and after you and your loved one create an advance directive to ensure he or she feels comfortable carrying out the terms. Make sure the documents follow the legal format for your parent’s state, as each state has its own. Make sure everyone—family, friends, spiritual advisors, nursing homes, hospitals—who needs to know about the documents is aware of them. Make copies of the documents for all doctors and agents.
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Some of this material appears in slightly different form in Caring For Your Parents: The Complete AARP Guide.

© 2003, 2004, 2007 AARP. Reprinting by permission only.

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