Of course, implementing important estate planning steps is easy if your parents remain in good health, but power of attorney covers you in the event you have to make choices without their input. Depending on the circumstances, consider buying long-term care insurance. This covers the expense of nursing homes and other types of elder care. However, it's important to bear two caveats in mind. First, the older your parent, the more the insurance will cost.
Coverage becomes all the more costly if an illness is involved.
A bypass trust stipulates that, when the first spouse dies, his or her share of the assets go into a trust, which the surviving spouse can use as needed. Then, once the other spouse passes away, all assets pass to heirs free of estate taxes, thanks to a one-time exemption. Not only can this skirt heavy estate taxes, but it also provides a source of income should the surviving spouse need it. By the same token, don't overlook gifts from members of the older generation as another way to avoid estate taxes. New governmental regulations have made it much more difficult to empty the bank to qualify for Medicaid.