Protecting Your Parents’ Wishes

A revocable trust allows your parent to continue managing their own assets and care while also naming a trusted person to step in if they’re ever unable to – or no longer want to – do so.

As your parents grow older, helping with their care often begins in small ways – like attending a doctor’s appointment or putting a second set of eyes on their finances. Over time, though, these moments can add up to something more. Before you know it, you’re taking an active role in managing their day-to-day decisions.

Planning ahead can be one of the most meaningful ways to support your parents through that transition. By having conversations early about what they want for their health, finances and even housing, you can put a plan in place to make sure decisions are made thoughtfully – not rushed during stressful moments.

A revocable trust is one of the strongest ways to do just that. It allows your parent to continue managing their own assets and care while also naming a trusted person to step in if they’re ever unable to – or no longer want to – do so. That trusted person is called a successor trustee, and they act as a fiduciary who is responsible for carrying out the terms of the trust document.

Setting the Foundation With a Conversation

It’s easy to put off discussions about your parents’ future finances and care, but starting them early can make a huge difference. A revocable trust needs to be created while your parent is still able to make their own decisions, which makes these conversations an imperative first step. By talking through their preferences now, you can help make sure the trust reflects their wishes and gives clear direction if a successor trustee ever needs to step in.

These discussions should focus on choices that will shape the trust itself: who your parent wants to serve as successor trustee, what their financial priorities are, where they want their assets to go after death and how the trust’s assets should be used if care needs change. For example, they may want to clarify whether maintaining their home should remain a priority, or how conservatively investments should be managed. They may also want the successor trustee to continue gifting to family members – all of which must be stated in the trust agreement.

This is also a good opportunity to help your parent think through who is best suited for the role of successor trustee. The responsibilities can involve managing investments, paying bills, keeping records, working with tax and legal professionals and even making difficult financial decisions during emotionally charged times. For some families, naming a corporate trustee like Baird Trust alongside a family member can provide professional expertise and an objective perspective – while allowing loved ones to focus on supporting your parent.

Taking Over Decision-Making

If and when the time comes for the successor trustee to step in, a revocable trust gives the authority to manage your parent’s finances according to the trust agreement. While every situation is different, the trustee’s responsibilities often extend well beyond writing checks.

In some cases, that may mean making ongoing decisions about how assets are allocated and making sure there is enough available cash to meet current expenses. In others, it may involve maintaining insurance coverage – like long-term care or property insurance – to help make sure the coverage stays aligned with your parent’s needs. No matter the specifics, the trustee is expected to fulfill these needs using only the guidelines outlined in the trust.

These financial responsibilities also play an important role in supporting your parent’s care. Whether funding in-home care, purchasing specialized medical equipment or adjusting spending as care needs evolve, the trustee keeps financial resources available.

Coordinating Financial and Care Decisions

Even with a revocable trust in place, financial decisions are only one part of the bigger picture. As your parent’s caregiving needs evolve, they may require someone to manage both their financial responsibilities and caregiving decisions at the same time – and those roles don’t always fall to the same person.

While a successor trustee is responsible for managing the trust’s financial assets, decisions around medical care are typically handled through separate documents, like a power of attorney or healthcare directive. In some instances, that means one person may be overseeing finances – ensuring bills are paid and care is funded – while another is coordinating with doctors or making healthcare decisions.

Because these responsibilities are interconnected, communication and coordination are key. For instance, a doctor might recommend in-home care after your parent is discharged from a hospital stay. While the person serving under healthcare power of attorney may help decide exactly what that care entails, the successor trustee helps ensure the financial resources are there to implement that plan. Having clear roles in place ahead of time can help these decisions happen smoothly.

Every family’s circumstances are different, which is why preparing for your parent’s care isn’t one-size-fits-all. By putting a thoughtful plan in place, selecting the right successor trustee and coordinating financial and healthcare decision-making, you can help ensure your parents’ wishes remain at the center of every decision.

To learn more about how a revocable trust can support your family through these transitions, reach out to your Baird Financial Advisor or contact Baird Trust.

Baird Trust Company (“Baird Trust”), a Kentucky state- chartered trust company, is owned by Baird Financial Corporation (“BFC”). It is affiliated with Robert W. Baird & Co. Incorporated (“Baird”), (an SEC-registered broker dealer and investment advisor), and other operating businesses owned by BFC. Past performance is not a predictor of future success. All investing involves the risk of loss and any security may decline in value. This is not intended as a recommendation to buy any security and views expressed may change without notice. Baird Trust does not provide tax or legal advice. This market commentary is not meant to be advice for all investors. Please consult with your Baird Financial Advisor about your own specific financial situation.