Helping Elder Parent(s) Manage Their Assets

I talk with my mother nearly every day. She and my father raised me well and gave me all their love and caring while I was under their roof and mom still gives me her two cents today whether I want it or not.  My father died 14 years ago and while that impacted my life more than anything else ever has, looking out for my mother while she has been on her own is at the top of my priority list.

These days, it is not unusual for many people to live 20 or more years beyond the normal retirement age. Unfortunately, as many seniors reach their eighties and nineties, plans that were satisfactory at age 65 may require a second look. One area of special concern to many older seniors (as well as their adult-age children) is whether or not they will be able to continue to manage their assets. If they feel they can no longer handle these duties, they may wish to transfer this responsibility to others.

A variety of arrangements are available to achieve this objective. Here are a few you may want to consider:

Revocable and Irrevocable Trusts. Seniors who want to retain control over their property while delegating responsibility for daily management to others may want to consider a revocable trust. This arrangement allows seniors to monitor the management of their assets, yet it offers the flexibility of changing the trust as experience and circumstances warrant. As added protection, a revocable trust can be left unfunded, as long as a senior is legally competent. As an alternative, seniors who are willing to relinquish ownership of assets altogether could establish an irrevocable trust.

Durable Power of Attorney This mechanism allows seniors to appoint a trusted relative or friend as a representative in legal and financial decision making. The powers granted, which may be broad or limited in scope, may vary from state to state. They remain in effect during disability or incompetence, although, in the event of incompetence, a guardian or conservator could revoke them. Some financial institutions are reluctant to recognize durable powers of attorney, so it is worthwhile to explore this possibility beforehand.

Private Annuities – Seniors can choose to transfer property to a family member in exchange for the recipient’s promise to make periodic payments for the rest of the senior’s life.

Informal ArrangementsSeniors can transfer property informally to their heirs—in many cases free of gift taxes—in exchange for being taken care of for the rest of their lives. This arrangement, however, should be approached with caution. Even well-intentioned adult children may deplete assets through poor management, divorce, or creditor claims. Once the assets are gone, the senior could become dependent on the goodwill and financial circumstances of relatives.

Regularly Review Plans – As seniors age, a periodic review of their financial arrangements should be made. In making the transition to later life stages, new needs and concerns may justify plan revisions. Seniors and their families should consult with their financial professionals and attorneys to help determine the best-suited strategies for their needs.

Work with Professionals – Make sure to meet with your parent’s estate planning attorney and financial adviser.  They need to make sure the plans are up to date, accounts are titled correctly and beneficiaries are current.

Your parents took care of you when you needed them most. Now is the time for you to return the love and look after them.  Don’t expect them to ask for your help. Be proactive and inquire about their assets and ask to review their estate plan so that they can answer any questions you may have.

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  2. Greetings Brad,

    As always, you have done a fine job with all of these articles you have provided. I read them with interest and learn from them.

    Keep up the fine work!

    Best to you and your family,

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