A Few Key Points in Financial Review for Declining Senior
You have probably worked very hard your entire life to accumulate what you’ve got. You may have made many shrewd business and financial decisions over the years, but now it’s time for a financial evaluation.
Here are a few of the many items to consider:
- It’s time to take a step back and determine whether your assets are structured properly. Your adviser should be able to help you determine whether your investments are aligned with your life goals at this stage of your life. For example, if you are retired, you may not want to take the same risks that you took in your earlier days.
- Structure of your financial plan is very important. Often your financial plan can be re-structured so as to provide income to help pay for a Professional Caregiver or an Assisted Living Facility. Many times just a few extra dollars per month may help ensure your desired quality of life.
- An often overlooked objective of a finance evaluation meeting with your advisor should be to determine (1) whether your assets can be used by the person(s) you designate; and (2) that these named individuals can use your resources for your benefit. If you should become suddenly incapacitated, who has access to your money? Anyone? Are you sure? If so, does this person know what is expected of them? Have you discussed your care wishes with them? Do they know how you would like your assets to be used for your benefit? Can they even access your accounts?
- Some accounts are very restrictive. By this I mean that they are often set up where only you can make decisions or move money from the account. If you are the only owner of the account and you become suddenly incapacitated, then anyone else (even your spouse or kids) may have problems when they need to withdraw money. It doesn’t matter the reason – even if one of the kids wants to withdraw money from your account to pay for your medical expenses, they may not be able to do so. If they are not listed as an authorized signer on the account OR if you don’t have a properly prepared Power of Attorney, then it may require a Guardianship Order (which is an Order of the Court) to access the money.
- Some accounts may have high penalties for early withdrawal or substantial taxes to pay (ex. IRA) if money had to be withdrawn in a lump sum. We have seen many families forced into a huge tax or penalty “hit” because they were forced (by life events) to withdraw money quickly to use for their Loved One’s benefit. Some pre-planning may have served to minimize the severity of this tax or fee.
The Financial portion of the Bridge of Life Plan is a very important, but often overlooked area. It is very beneficial if your Financial Advisor and your Elder Law Attorney can work together to craft a Plan to take potential future caregiving needs into account.
Stay tuned until next time for more keys to your Financial Plan Evaluation for declining Seniors.