Helping Seniors with Finances – Pulling Together a Financial and Estate Management Team

    Published: 06-16-2009
    Views: 9,172
    Mary Alexander with Home Instead Senior Care provides some tips on how to help your senior loved ones manage their finances, and tips to prevent them from becoming targets of fraud. This video will focus on pulling together a financial and estate management team

    Helping Seniors with Finances.

    Pulling Together a Financial and Estate Management Team. Mary Alexander: Hi, I am Mary Alexander from Home Instead Senior Care. Today, I am discussing how to help your senior loved ones with their finances. Now, I want to talk about organizing a Financial and Estate Management Team. Helping your parents plan ahead in managing their estate and financial affairs is vital to both their physical and financial health. Making sure their investments are protected, insurance is all in order, and taxes are being paid, will save them and you future headaches. Also, good estate planning will ensure that the financial assets that are most important to your parents, no matter how much or how little go to the intended recipients as quickly, cheaply and as easily as possible. On the healthcare side, certain legal documents can ensure that your parents' wishes for medical treatment at the end of their lives are respected and fulfilled. Waiting until there is an emergency or crisis to get any or all of this paperwork in order could result in delays of care or release of funds that could otherwise help support and comfort your parents, at a time when they need it most.

    To help insure everything is in order, you should work with your parents to organize a good team of professional assistance. This includes an Attorney, a Financial Planner, an Insurance Counselor and a Tax Professional, preferably a CPA or Certified Personal Accountant.

    From a legal standpoint, let's talk about the five documents that will ensure that you can assist your parents in a medical or financial emergency. And, at their deaths, ease the distribution of their estate.

    First, is a Medical Directive, also known as a Living Will or Advanced Healthcare Directive. This document sets out what kind of care your parents want to receive, if and when they become ill or incapacitated. Second is a Durable Power of Attorney for Healthcare and HIPAA release. A Durable Power of Attorney for Healthcare allows you to make healthcare decisions for your parents. A HIPAA release gives you access to your parents health records and physicians. Third is a Durable Power of Attorney for Finances that allows you to manage your parents' financial affairs, pay bills, sell property, and so on, while they are still alive. Fourth is a Revocable Living Trust that allows your parents to retain control over their estate while making transfers of assets to beneficiaries. Your parents designate what property, such as a home, investments, jewelry, and so on goes into the trust, and to whom it will be granted.

    Fifth is a Will. A Will makes clear who will receive your parents' assets and personal property. A properly written Will, will help to avoid disagreements over your parents' estate after their deaths. During their lifetimes your parents act as executors of their own living trust. A Revocable Living Trust has an important advantage. It allows their estate to avoid probate at the time of their deaths. If your parents have a Financial Planner or Investment Counselor, it's important to advice them to check in with them on a regular basis. Make sure their advisor has them in a low-risk investment vehicles, and that a portion of their funds are accessible at an emergency, should they need them. A Financial Planner can also assist with making determinations about health and medical funding options, such as a reverse mortgage or life settlements. If your parents don't have a Financial Advisor in place, seek out services at firms that can recommended by local senior care resources, or through your parents banking institution. Having someone who is a Certified Financial Planner or CFP is generally a safe bet. In all cases, be sure it's clear how the planner services will be paid for.

    It's also good to advice your parents to get a second opinion on investments and financial purchases, especially if they are approached about changing any of their investments.

    AARP has a lot of great resources on their website. I encourage you to check them out at www.


    org. You can also check with the Financial Planning Association at www.



    The next member of your parents' professional services team is an Insurance Counselor. Beyond health insurance, you can ask them about the pros and cons of long term care insurance, and whether your parents have enough, or need additional life insurance coverage. They can also provide guidance on insurance investment vehicles, and work with your Investment Advisor to see if these opportunities may make sense for your parents' financial situation.

    Lastly, don't forget the CPA or Tax Advisor. It's easy for any of us to get confused by new and current tax loss. Your parents may be receiving certain funds or payouts that require them to pay quarterly tax payments. If not paid in a timely fashion, your parents could be subject to penalties that could deplete their resources. The cost of hiring a Tax Professional is a wise investment over paying fines and penalties that could have been avoided. Plus, it lessens stress, and could help avoid having to go trough an audit by the IRS.

    Now that you've helped your parents get their professional service team lined up, let's talk about some options that are available in the event they need financing for care.