You need a Plan B for estate and long-term care planning

When I meet with clients planning their estates or long term care there usually comes a point when someone says “I never thought of that.” That point is reached earlier with some than others. Plans for estates and for long term care need a “Plan B,” the backup plan that goes into gear when the first and preferred plan no longer works. Here is how it happens.

Suppose you are considering a Financial Power of Attorney. If you are married, it is an easy step to name your husband or wife as Agent under the Financial Power of Attorney. After all, you probably already have your spouse named jointly on the house and on your bank and investment accounts.

The primary reasons you need a Financial Power of Attorney are to cover IRA’s and retirement accounts that are, by definition, “individual” and to give your spouse the ability to sell your residence if you should become disabled. Having arrived at the decision to complete the Power of Attorney you might think you are done. What happens if you and your spouse are in a common accident? Who takes charge of finances?

This is where “I never thought of that” springs into action. The concern usually is, where you have more than one child, who among them will serve. You might prefer the el-

dest child but he might not be good with handling money. Where you have two children and name one you might be concerned that the other will feel slighted. You might even be concerned that the other will feel less loved or less valued.

Sometimes parents handle either/or choices by naming both but the most common opinion among estate planners and elder law attorneys is that this might bring inherent problems. Suppose the children disagree and there is a standstill. Suppose one acts and the other fails to act. Should decisions be made jointly which can be cumbersome or individually where one might decide and the other disapproves?

Another method of handling the impasse is to name the second child as backup if the first is un- able or unwilling to serve or even, where there are more children, to name other children as additional backups in order of preference.

Sometimes the parent believes that one child would be better making medical decisions and the other better handling the accounts. In that case one child might be named Health Care Power of Attorney and the other Financial Power of Attorney. There should be backups for them in these capacities also. The same considerations come into plan when deciding on Executors for your Will. Your spouse, unless your spouse is disabled and unable to handle the position, is generally named first as Executor or Executrix and then an adult child.

There are unique situations to each family. For instance, if you want one of your adult children to serve as backup to your spouse on your Health Care Power of Attorney (or as your primary agent if your spouse is deceased or unable to serve) but want all of your children to be able to access your medical information about you in a crisis, you might name one child as Health Care Agent but provide HIPAA Privacy Releases to the others.

For long term care, your first plan might be to stay home indefinitely. However, this is not always feasible for many reasons. You might live alone and all of your children live at a distance and unable to return to care for you. You might have no close relatives who can help and you cannot afford someone to live in, an expense that can be higher than nursing home care. If you have adequate funds you might consider buying into a retirement community (CCRC). Although it might have a substantial upfront cost, you could know that you will be taken care of if you later need personal care (assisted living) or skilled nursing. Alternatively, you might put away funds for personal care later.

Plans change and need regular review. The agent you appointed years ago to make decisions for you might now be deceased or disabled herself. You can save yourself a lot of trouble if you develop a Plan B now. Tune in on Wednesdays at 4 p.m. (note new time) to radio WCHE 1520, “50+ Planning Ahead,” with Janet Colliton, Esq., and Phil McFadden, Home Instead Senior Care. Janet Colli- ton, Esq. limits her practice, Colliton Elder Law Assocs, PC, to elder law, life care, special needs, and estate planning and estate administration with offices at 790 East Market St., Suite. 250, West Chester, Pa., 19382, 610-4366674, colliton@collitonlaw. com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with longterm care needs.