For caregivers taking care of an older adult, the financial and legal aspects of estate planning can be overwhelming. With so many legal and fiscal ramifications wrapped up in every choice, many adults caring for an aging parent often feel paralyzed and unsure where to start.
Yet, skilled financial planners and attorneys are trained to help older adults and their beneficiaries plan for the future, offering much-needed peace of mind for both seniors and their caregivers.
We asked financial and estate planning experts across the country about the top issues, questions and considerations to keep in mind as you help your older adult start this often-confusing process.
Scott Alan Turner, CFP, Rock Star Financial
“The biggest tip is just to start having conversations, which can be a challenge. Nobody wants to talk about dying, yet everyone is going to die … Keep in mind if the elder person is the client of a financial planner, the planner is often NOT allowed to discuss the client’s situation with anyone other than the client—including discussing it with the caregiver. It’s like attorney-client privilege. So, the caregiver may have to give explicit instructions to allow the planner to have those conversations and answer questions.”
Stephen Landersman, CFP, President, Unifi Advisors
“The first and most important question to ask is, ‘Who are my beneficiaries on my life insurance and retirement accounts?’ Often, these are left unchanged when a spouse passes away. The next question should be, ‘What gifting could or should I do to my heirs to help reduce the size of my estate and protect my assets from possible future events?’
“Finally, ask them if they have a copy of their recently updated power of attorney and will. Your investment professional and financial planner having these documents can help make a difficult situation easier for the heirs and caretakers.”
Arvette Reid, Financial Advisor, Client Services Director, Lifecare Affordability Plan
“Find trustworthy financial advice. A good advisor will first work to understand your financial reality. Your first meeting should uncover hopes and fears for the future, along with gathering details of your finances, health, family and living situation. Then, they should build and share several health care and financial scenarios based on the discovery process. Collaborate on what’s working and what still needs consideration in different approaches to care choices and their impact on cash flow, investments and tax planning. Finally, there should be a documented plan with built-in contingencies that leads the way forward.”
Derek Notman, CFP, Founder, Conneqtor (part of the Trust & Will Financial Advisor network)
“Have a separate Power of Attorney (POA) for financial affairs—not the financial advisor and not someone who will materially benefit from any of the senior’s wealth. Ideally, the POA should be someone who is completely objective.
“The caregiver should watch for signs of others trying to manipulate the senior, such as asking for large sums of money, suggesting they be allowed to manage things, etc. Work together as a team with a financial planner. All meetings should be conducted together so everyone is on the same page.”
Deborah Adeyanju, CFA, Senior Advisor, GRID 202 Partners
“Financial disputes among heirs are unfortunately all too common. One thing that can at least prevent confusion, if not disputes, is clearly making your loved one’s wishes known … Make sure your loved one has an updated and legal executed will as well as a trust. Putting the latter in place will avoid the costly and public probate process for your loved one’s assets (real estate, investment accounts, etc.) … Making your wishes known is important at any age. But as people age, especially if they are struggling with dementia or other cognitive decline, it is important that their loved ones know their wishes.”
Brandon Steele, CFP, ChFC, Co-founder & CEO, Mainsail Financial Group
“If you can, join them in any discussions with their advisor. You may not need to be involved in every conversation with their financial planner. Still, a great financial planner may typically involve the family regardless of dependence to help develop thoughtful estate planning strategies. Especially if you are a caregiver, it may be helpful to facilitate that the advisor speaks with the family during this process. This will not only help develop more strategic planning around their estate but also to ensure there is no financial exploitation happening. Unfortunately, financial exploitation for seniors has become more and more prevalent over the years as their wealth continues to build and more people are looking to take advantage.”
Nicole Middendorf, CEO, Prosperwell Financial
“Are your parents staying on top of their finances? Are their bills getting paid on time? You can offer to help your parents develop a budget or spending plan. This will allow you to see how much money they have coming in and how they are spending it. It is also important to look at how much they will need if they need to move into an assisted living complex. Helping them with a budget is not to change how they spend but to bring an awareness to the cost of long-term care and to help make decisions.
“Have you discussed housing issues with your parents? Is their current situation satisfactory and do you have contingency plans? Many times, parents will need more care than we can provide or they think they need. Helping them compare costs of nursing homes and/or assisted living facilities can be eye-opening as well.”
