Helping Elderly Parents with Their Finances and Estate Plan

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Estate Planning For Elderly Parents

As our older parents age it is harder for them to deal with the financial details of their lives. With the complicated financial products out there and the low-interest rate environment it becomes very difficult for them to make sound financial decisions. In addition, dealing with one’s own mortality can prevent parents from focusing on their estate plan. As many know, if they fail to have a will, trust or overall estate plan, the state will decide who gets their wealth via the laws of intestate succession.

The situation becomes even more acute in those many cases where there are second and sometimes third or more marriages. Most of these couples do not appreciate the problems that can occur for the surviving family members. A Russian Roulette situation can arise for the families depending on who dies first. Planning and careful drafting is almost certainly necessary in these situations to avoid family warfare and large and usually inevitable litigation costs. Couple this with the emotional toll that these situations engender, you can readily see why estate planning is so vital.  (For more on the estate planning process readers should explore Estate Planning Mistakes: 5 Not So Easy Pieces)

The point here is that children need to help their parents in getting their financial and estate plan in order. However, they must tread very carefully to avoid having their parents think they are acting in a self-serving way. Additionally, children should carefully deal with and tell their siblings of such involvement to avoid any later challenges of overreaching, duress, fraud and undue influence.

So how does one talk with their elder parents about these important issues? To get some ideas about how to approach parents on these vital issues please read my article entitled Estate Planning for Elderly Parents: Discussing Finances and Estate Planning with Your Aging Parents

Copyright © 2012 – Steven J. Fromm & Associates, P.C., 1420 Walnut Street, Suite 300, Philadelphia, PA 19102. All rights reserved.

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18 responses to “Helping Elderly Parents with Their Finances and Estate Plan

  1. Pingback: Helping Elderly Parents with Their Finances and...

  2. Pingback: Phillip Seymour Hoffman: Lessons For Us and Especially Women On The Estate Plan Left Behind | Philadelphia Estate and Tax Attorney Blog

  3. Very good article that speaks to the challenges facing the adult child of aging parents. I have recently published a book on the subject of preparing the adult child to be a financial caregiver. (http://amzn.com/147013148X) Truth is, it “takes a village,” a team of advisors who can not only assist the adult child with the tasks involved, but also shield him or her from the inevitable resentment from both parent and siblings for them having to get involved in the first place.

    - David W. Russell, CFP
    Sr. Vice President
    Pinnacle Trust
    Madison, MS

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  4. I agree this discussion is an important one to have with your parents. Depending on the parents, they may or may not be willing to share information with their children. Unfortunatley an adult child cannot push the issue too far if the parents are unwilling. What I say to adult children is, do not do to your children what your parents may have or be doing to you. Talk to your children. These are the baby boomer I am speaking to.

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    • Thanks for your comments. You are definitely correct as this topic requires a lot of finesse and sensitivity. But the problems that arise when this area of concern is neglected can be overwhelming, expensive and divisive. It can permanently alter and perhaps destroy the relationships of the remaining family members.

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  5. A friend told me once about a probate she handled. The wife died, leaving her surviving husband. The estate was probated and concluded, with everything going to husband. Husband was moving out of longtime family home into an assisted living facility and donating most of the furniture to Salvation Army. He went through the desks and dressers one last time to make sure everything was cleared out. One drawer in a dresser was stuck – in trying to free it, he noticed paper on the bottom of the drawer. It was a stock certificate for Standard Oil from the 1950s! He looked at the remaining drawers and found what turned out to be almost $700,000 worth of stock certificates from Standard Oil (Chevron) and IBM! I always tell clients to inspect furniture and furnishings carefully before disposing of them!

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  6. Steven, wonderful article. I am a life settlement broker and deal with aspects of estate planning on a daily basis. Just to share a story….. an eldery women who did not disclose her finacncials to her children had passed away and the estate was closed out. A few years later, while they were cleaning up her country home, they found an inforce life insurance policy on the bottom of one of the drawers that noone knew about! There really are so many financial tools out there that the elderly may not be aware of whats availbale to them. Although it might be tough to have the conversation with them, if you tread lightly and offer to help in a non self serving manner you can really make a world of a difference for them and their entire family.

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    • This is another great story, Geoff. Your advice as to treading lightly and to bring real service to your parents with out a personal agenda is key. As to the unknown insurance policy, financial advisors, CPAs and attorneys can help organize their assets and files and help them produce lists to aid them while alive and the family after they die. These war stories are more common the most people realize. Thanks so much for your insights, Geoff!

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  7. I am the son of parents who grew up during the Depression, and like many other parents of that generation, kept their finances a secret from from me and my now-deceased brother. My father who passed away in 1996 , was a CPA who was able to handle my parents’ finances by himself, albeit extremely conservatively. After my dad died, my mom took over and for many years continued the secrecy. I knew my mom had a will and a living will and was “comfortable” but that was it. A couple of years ago my mom (who is now 86) and I began a “dance” about her finances. Although she has slowed down, my mom still lives independently but realized that she could use my help with financial questions and about her investments. Now she regularly solicits my advice and , at her request, has revealed her finances to me fully. I always allowed her to take the next step toward full disclosure, never pressuring her for information and that has worked well. Of course I have the advantage of having a parent who, although elderly, has maintained her full mental acuity and since I am the only surviving child I have none of the complications associated with families with multiple siblings and/or half-siblings

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    • Hey Jonathan. Thanks so much for your sharing your personal experiences here. This is a perfect example of how these situations should be handled. Your finesse and caring ways ultimately produced a great result for your family. There is a great lesson here for all of us. Thanks again for your heartfelt comments.

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  8. I will tell you – the conversation goes much more smoothly for those who are an only child. When you start mixing siblings, blended family scenarios, etc. forget the complicated financial products and planning – the family dynamics must be considered first before chartering that course. Thank you for sharing the blog article!

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    • So true Sheryl and thanks for your kind words of thanks.
      This can be very daunting. But the reality is that in these tough family dynamics it may be better for parents to see that happening before their eyes as it may allow them to draft documents that can minimize and/or address some of these problems. Admittedly some of these problems cannot be fixed in any event, but addressing the process before death is probably a better way to proceed.

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  9. Excellent articles. If I might add one more recommendation: It is often difficult for anyone to either recognize or admit that their mental acuity is not what it once was. Elderly parents can forget about accounts, policies, pensions, and pieces of property. It would be a good idea to try to approach your parents before you have to hunt down the assets, or after they lack the capacity to make appropriate planning decisions. I have been involved in planning where one spouse bought stock over the years in certificate form, and it was scattered throughout the house and in several accounts. It took over two years to locate everything and consolidate it. By the time the process started, it was already too late to make appropriate plans.

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    • Kathleen, this is a great example of the mental and monetary costs that can result. Compound this problem with our mobile society when children are not close by. These type of problems just escalate and can get out of hand. Thanks so much for your insights and sharing your first hand experiences. This is why it is so important to get involved and get an estates attorney on board for guidance as to the practical issues as well as crafting the appropriate estate plan and having the proper documents drafted.

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  10. It is never too easy settling an estate planning process. This is one of those things that many of us may not know much about until we actually experience personally.

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    • Great points Martin. That is the reason for drafting this type of article, since most people do not understand how difficult the process may be if they do not get involved early or at least on a timely basis. In the 35 years of practicing estate law, the problems and issues never cease to amaze me. Thanks for your insignts.

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