As parents age, it’s important to consider the implications of what their children may face.

1. Update – or create – a will. The will should name an executor, which doesn’t have to be a family member, and your beneficiaries. The will typically states how you want your overall estate distributed – for example, equally among your children. You can also develop a Personal Property Memorandum to detail how you’d like specific items distributed, including vehicles, art, jewelry and items of sentimental value.

2. Provide a comprehensive list of accounts to executor and beneficiaries. When the time comes, the people who love you are going to be distraught at your passing. Make it easy on those left behind by letting them know what’s included in your assets, such as retirement accounts and annuities, brokerage accounts and checking and savings accounts. You might also share a list of your consultants, including your financial advisor and accountant, and a list of where you keep all your relevant paperwork, including house deeds and car titles.

3. Assign a Power of Attorney for checking and savings accounts. Many people who are aging consider adding a child or other trusted person as a joint owner on their checking and savings accounts so they’ll be able to pay any bills in the case of incapacitation. However, something to consider is that being a joint owner doesn’t allow the person to deposit any checks made out to you without your signature. Letting your bank know who holds your Power of Attorney will facilitate deposits as well as payments. Also keep in mind that adding someone as joint owner on certain accounts, such as brokerage accounts, can create a tax liability for them, so assigning them as Power of Attorney could be the better approach for them in the long run.

4. Confirm beneficiaries on all investment and annuity accounts and life insurance policies. When opening accounts or policies such as life insurance, IRAs and brokerage accounts, you’re usually asked to name one or more beneficiaries. It’s easy to forget about this as life goes on, but things do change: new children or grandchildren are born, and other beneficiaries may pass away. Whenever there’s a life change in your family, consider whether you should make any updates to your beneficiaries on all your relevant accounts. And if you haven’t named any, keep in mind that the asset will default to your spouse or, if he or she is no longer living, to your estate – which leads to probate and tax ramifications.

5. Consider creating a living trust. Depending on the size of your estate, your family makeup and where you live, it may make sense to hold your assets in a Living Trust, which can help avoid probate. Instead of an executor, you’ll assign a trustee to manage the distribution of any assets in the trust. To find out if you and your beneficiaries could benefit from a trust, speak with your financial advisor.

6. Consider gifting. If you have sufficient financial assets, you can gift up to $14,000 per beneficiary with no tax ramifications to them. This will reduce the overall size of your estate for estate tax purposes without impacting the beneficiary’s tax situation.

7. Learn how Medicare works. As with any insurance, Medicare is complicated and learning about what’s covered and what isn’t when you’re in the midst of an illness may not be ideal. Learn about coverage limits before you need to know – for example, how many hospital days will be covered. If you think you need it, supplemental insurance is also available to provide coverage above what Medicare covers; talk with an insurance advisor about what’s right for you.

8. Plan for long-term care. If you’re retired, or about to retire, and have significant assets, consider purchasing a long-term care policy. This insurance will cover long-term care costs, which are not covered by Medicare. As an example, nursing home stays are typically considered long-term care if they’re simply “custodial” rather than medical, and so will not be covered by Medicare. These facilities are pricey, and can quickly erode the financial assets you’ve worked hard to accumulate and want to pass on to the next generation.

Again, thinking about topics like illness and death are never pleasant, but opening up the lines of communication between aging parent and adult children can smooth the way for financial decisions and caretaking during what will inevitably be a challenging time for everyone.

To learn more, talk with one of our advisors in the Investment and Retirement Center at On Tap Credit Union.

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On Tap Credit Union is not a registered broker/dealer and is not affiliated with LPL Financial.