If we want to protect our elderly parent’s finances as best we can, there are a number of different steps that we can take. It is important that you work with people who you can trust with finances. When trying to protect your elderly parent’s finances, you can rely on these three tips.
Tip #1 – Make Sure That There Is A Will And A Power Of Attorney
According to a recent report, the number of Americans without a will is at an astounding 34 percent! If there is no will, it means that the estate goes into probate. This means that you will end up wasting a lot of time and a lot of money, and it
A living will, also known as a Power of Attorney (POA), is an extremely important thing to consider. If your parents become mentally incapacitated or ill, a POA would allow you to take care of their finances. A Power of Attorney can help with the financial burden if the insurance policy has not been paid yet in order to pay for funeral costs for example.
Tip #2 – Know The Professionals Working With Your Parents
Knowing the advisors and professionals that your parents come into contact with is extremely beneficial. You should go beyond just knowing the phone number to your parent’s accountant, but you should meet with them – make sure that you both are on the same page. It ensures that they are aware of your family dynamics and your parents’ situation. You want to make sure that they have your parent’s best interests at heart.
Knowing these professionals beforehand also helps to reduce stress in a traumatic or tragic time. If you only meet with these professionals once you are grieving, chances are that you are not going to make the best impression or get the most amount of information from them.
Tip #3 – Not All Financial Professionals Are Created Equal
Most people assume that bankers, brokers, or other types of financial professionals all have to think about their client interests first. While this is often the case, there are some important differences in the different types of financial professionals.
For example, while fiduciaries are bound by a code of ethics (the fiduciary standard), which means that they have to put their own interests second to their clients’ best interests, brokers only have “suitability standards.” These standards mean that they provide sound advice, at the moment that they give the advice. You want to make sure that you make the right choice in who you work with.
All three tips have a common theme – make sure that you put some forethought and planning into your parent’s finances. If you already find yourself in a crisis, chances are that there is nothing you can do about it now. However, if you are able to build relationships and do some research when it comes to your parent’s finances, it is going to help save you time, money, and heartache in the future.