Here are some legal documents that can help you: 

Power of attorney: This document gives a person (the principal) an opportunity to authorize an agent (usually a trusted family member or friend) to make legal decisions when he or she is no longer competent. There is no standard power of attorney; thus, each one must be geared toward an individual’s situation. It is important for the caregiver to be very familiar with the terms of power of attorney because they spell out what authority the caregiver does and does not have. The agent should make multiple copies of the document and give one to each company with which the principal does business.

Health care proxy: This document appoints an agent to make all decisions regarding health care, including choices regarding health care providers, medical treatment, and, in the later stages of the disease, end-of-life decisions. This means that the agent may authorize or refuse any medical treatment for the principal. This power only goes into effect once the principal is unable to make decisions for himself and is activated by the principal’s attending physician.

Living will: A living will allows the person to state – in advance – what kind of medical care he or she desires to receive and what life-support procedures he or she would like to withhold. This document is used if a person becomes terminally ill and unable to make his or her wishes known or if he becomes permanently unconscious.

Living trust: This document enables a person (called a grantor or trustor) to create a trust and appoint a trustee to carefully invest and manage trust assets once the grantor is no longer able to manage finances. A person can appoint another individual or a financial institution to be the trustee.

Will: A will is a document created by an individual that names an executor (the person who will manage the estate) and beneficiaries (those who will receive the estate at the time of the person's death).

Sit down with your parents to thoroughly discuss their finances, and plan exactly how to pay for the high costs of potential future care, such as hospital bills and fees for assisted living and nursing home facilities. Make sure you know where to find all of their financial documents (bills, bank and investment account statements, tax records, etc.) in case you ever need to access them.