Estate planning is important for everyone, regardless of age. After living through the unprecedented pandemic, many people have a new perspective on life. However, although the pandemic generated more interest in estate planning, a 2021 study conducted by Caring.com found that the percentage of people aged fifty-five years or older who have a Will has fallen from 60% to 44% since 2019.[1] In view of this trend, now is a great time for us to work together to educate our senior citizen clients and help craft financial and estate plans that will protect them during their lives and their loved ones at their death.
Managing Investments
Financial stability is important. Having sufficient funds allows a client to cross things off their bucket list and leave behind a financial legacy for their loved ones or favorite charities. Depending on the client’s objectives and the stability of the markets, you can play a critical role to ensure there are funds available to carry out as many of the client’s desires as possible. With a potentially large amount of money sitting in accounts, it is also important to ensure the accounts are transferred to the appropriate person or trust at the client’s death.
Planning for Retirement
For many clients, their retirement accounts will supply a large portion of their income during retirement. As a client begins to contemplate retirement, they will need your expertise to determine when it is financially feasible to stop working, or at the very least, scale back their work; how much they should be contributing prior to their retirement; and how much they can spend during their retirement. If the client has already retired, you can provide important counseling to make sure the client has a budget and is living within their means based on their overall objectives.
Income Tax Advice
As clients get older, they may be entitled to special tax benefits. Your expertise can help guide the client in preparing their income tax return and making the most of the benefits to which they may be entitled. This can be especially important once the client has retired and is living on a fixed income from retirement and investment accounts, as well as Social Security.
Evaluating Long-Term Care Insurance
According to the Administration for Community Living, a person turning 65 has an approximately 70% chance of needing some type of long-term care services and support for the remainder of their life.[2] It is natural for clients to wonder, “How am I going to afford that?” One option clients may consider is long-term care insurance. You can discuss long-term care insurance options with your client and whether it would be beneficial in their situation. You can also keep watch for less-than-reputable companies that may try to take advantage of your client.
Getting the Right Estate Plan in Place
Many clients start to ask themselves some important questions about their future as they get older. The right estate plan will not only answer these questions but also allow the client to craft a custom plan that meets their specific needs.
- Who is going to help me if I cannot handle my own financial or medical affairs? By appointing an agent under a financial power of attorney, the client can choose someone to manage their financial transactions when and how they want. A client can also appoint a medical decision maker in a medical power of attorney. You can add extra value by ensuring that if your institution requires its own financial power of attorney, you explain that to the client and have the client execute the document, if necessary.
- Who can help me if I am on vacation? Depending on the client’s specific needs, the client can name an agent under a financial power of attorney and authorize the agent to take care of the client’s financial transactions at any point in time.
- How do I protect my loved ones after I pass away? By memorializing their wishes in a last will and testament or revocable living trust, the client can specify not only what they want their loved ones to receive but also how that money or property will be given or used for the benefit of their loved ones.
Preventing Financial Elder Abuse
You play an important role in recognizing and protecting your clients from elder abuse. By meeting regularly with your clients and keeping an eye on their finances—whether you are managing their investments or preparing their tax returns—you are in a better position to know what is going on in a timely manner than we are. The following warning signs could be innocent and harmless, but they should nonetheless alert you to the possibility that something more is occurring in your senior citizen client’s life. The best thing to do is to educate yourself about these warning signs and keep the lines of communication with your clients open.
- The client expresses a lack of knowledge regarding major financial transactions on their account.
- There are sudden changes in the client’s bank accounts or banking practices.
- Additional names have been added to the client’s accounts as joint owners.
- The client’s bills are going unpaid despite the client having adequate funds.
- Relatives are exhibiting questionable behavior, such as suddenly moving into the client’s home or claiming an interest in the client’s money or property.
Senior citizen clients need our help. By working together, we can provide a comprehensive plan that addresses their concerns and protects them and their loved ones. Let’s schedule a time to meet and discuss next steps for helping our older clients enjoy their golden years. Call 708-448-5169 or email Eileen@KerlinWalshLaw.com.
See also my Facebook Live ‘Lemonade on the Porch’ topic about the Union of Life Insurance and Estate Planning.
[1] 2021 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/.
[2] Admin. for Cmty. Living & Admin. on Aging, How Much Care Will You Need?, LongTermCare.gov, https://acl.gov/ltc/basic-needs/how-much-care-will-you-need.
