189. Taking Control of Finances for Your Aging Parents

Welcome to a Wiser Retirement Podcast . Before we get started with the episode , I want to tell you about a new e-book available on our website called 'Buyer Beware, Why do they keep trying to sell you that annuity ? ' . This e-book covers the various types of annuities , negatives to owning annuities, and better investment alternatives to annuities .

Welcome to a Wiser Retirement Podcast . Where we believe the best financial advice should always be conflict-free . I'm your host , Casey Smith , guiding you to financial freedom . Today is my co-host , Missy Beach . Hey , Missy .

Hey Casey , how are you ?

Doing good . Today we're going to talk about taking control of finances for your aging parents . This topic actually nearly needs some attention . It's just we've seen it . In my 23 years of doing this , and your time as well , we've seen some crazy things happen .

No , you're not .

And we became aware of it because one of the workers , one of the nurses she had around the clock care at her home . One of the nurses reached out to us and said hey , something doesn't seem right here . He comes by every day , he gets the mail . He goes through the mail and gives her some , and sometimes he takes some with him .

Oh , last one standing .

Yeah , and so she had left all the money . She wanted to leave all her money to Emory , I guess , is where her husband worked . Possibly this is several years ago so the details are a little fuzzy but in the end we went there .

Because she was still sound-mined . Oh yes , very much so .

And as soon as the money transferred , he showed up to the house , irate , made her transfer it back , so the money went back to . Morgan Stanley and he attempted to . Well , he also had her change the wheel back to him as 100% beneficiary .

Oh my gosh , what nerve yeah .

And his house was on West Paces Ferry down there in Atlanta and I wondered how many other people he had .

Strong arms .

Strong arms to get that multi-million dollar home . But he , she passed away maybe six , seven months later and he had the nerve to challenge the will in court, of course he did . And in the end the estate was split between him and Emory .

He got half , he got half .

And and partially was . Emory was like look , we , we know this is wrong , we know what he did was wrong , but in the end her intention was to leave money to this foundation and if we spend all of our time fighting him , there's really not going to be a whole lot left , I think that he's got maybe roughly a half million or so .

Of course he did . Yeah , doing the same thing , under a different name .

Exactly , and so it was just the whole process was so frustrating for us as we , as we watched and it just gave me . It just gave me . I tell people all the time is the barrier to entry to be a financial advisor is so low . I know , you know and and stuff like this will happen . We have that other .

This guy was just just shady .

There was no Ponzi scheme . But of course , when he looked at her portfolio , she had all the mutual funds that have the highest trailing fees . You know , I'm sure all of it was suitable . I'm sure what she was investing was perfectly suitable for her .

Exactly .

So so I say all this say maybe you know the problem here is , seniors . Seniors can get taken advantage of right .

And they do .

And this is why you need to talk about control of finances . As parents and relatives age . We did . I did a little research on on top scams . Believe it or not , it wasn't Morgan Stanley advisors . It was between the ages of like 60 and 70 , it actually ended up being the well , the study goes from like 60 to through 80 years old . So , romance scams .

Yeah , we didn't pay your taxes or you missed your duty or you didn't pay this ticket .

Yeah , we have a lady who got a phone call one time who actually owed the money , owed money to the IRS , and it said hey , you owe $5,000 to the IRS . She actually had much greater than that , oh so she thought it was a deal . Well , she , he said he had to show up at this bank and you need to give me $5,000 .

Yeah unlock your money .

Investments so that's a pretty big one 25 , $25 million dollars that this is in 2019 . 20 , 25 million dollars in investment fraud , tech support scams . I could totally see that . Time-share sales is another one 17 million dollars in 2019 , just in time-share sales fraud . And these are all just reported .

We have clients still buying them .

Yeah , and now you don't even buy a deed , now you get like points . Yeah buying points basically , but I don't know . Sometimes I think you know I really love going to Park City to ski and it costs so much for lodging . You have to really get ahead of that .

Are you talking yourself into a time-share ?

No , I'm not talking myself in a time-share . But I would . I would want a deeded one . I would I know that that's my unit yeah and I stay in that unit , or at least in that property . I don't know about the point system . So you know , if you look at losses , you know 20 to 30 year olds maybe lose 400 to 300 to $400 and monetary loss .

Yeah , and mentioning all these scams because they're getting so intricate now . Yeah you know the one with the phone call . You know where it's their grandson on the phone with their voice say hey , I'm crying . I need help right send a thousand dollars right away .

That's the that'll probably be what will hit us when we're there with their age . Yeah , but yeah , I think we've talked about that before . But basically , with AI , right now it can replicate voices , so you could have a scammer calling as a grandson's voice , saying I'm in so-and-so and I need a thousand dollars . You need to send it to this address .

It's happening now . So I mean , what's a grandparent supposed to do ? They freak out , but if you can educate them , say , hey , you might get this , what would you do ? You ?

need to call me .

You need to call your grandson . You do all these steps , just hang up , you know , because it's not gonna be your grandchild .

So , anyway , let's obviously that's that's preventative , but I think that the generation that didn't talk about money is probably starting to disappear now . Is it the next generation . Baby members tend to be a little more open to talking about money with their children , or lack of exactly .

Well , you know , I think about my own parents who are in their early 80s , like they never talked about money . I've only made them talk about money because this is my profession . So , but growing up we never talked about money . So now they're very open because , you know , I forced it .

Yeah , you also have to make sure you have the right sibling do that . You probably don't want a sibling that's in a tough spot financially to be working with your parents and money because that money is on disappear . So you definitely want the person doing it who is coming from a position of strength .

And that's a good conversation to have with your parents , because who they named maybe 20 , 30 years ago likely is not the right person to serve in that capacity today , because a lot of times , oh , it's just the oldest child , because it was the oldest child , but they didn't know how that person was going to be with money .

And sometimes you pick third parties . I mean typically with net worth above $2 million . You can find companies like Cumberland Trust that will just step in and settle estates , and then you remove the kids from that whole process .

Absolutely . And then the other big thing is don't name co executors .

Oh no .

Oh no , I've seen that go south way more than I care to admit . But yeah , do your family in a favor and only name one person to serve at a time .

So we put together a list , Missy , once you kind of start walking us through these , these five things that we should know about taking control of parents , finances , and I think we've already kind of started on number one here , which is start the conversation early .

Yeah , don't wait until the parents are , you know , at deaf store , you know , don't ? It's a hard conversation , so don't wait until you're in crisis mode . But then the next step is just to take inventory of your parents finances , figure out where everything is .

So that's huge you can also set up direct bill pay , so I do this with my mom .

Hi mom , she listens to the but she , she .

I set her up where it's auto pay , so all the utilities and insurance , all that automatically comes out of the account every month , and then I just kind of log in once a month and see that everything got paid and there's no $5,000 water bill , right .

And if you have something more complicated a household that might have household cleaning help or yard help or things like that , or more complicated bill pay situations , you can hire a third party bill pay situation . You know that comes with added expense and management , but it's very expensive , right ?

Yeah , I've never gotten quotes for that you know , because typically when I see that happening , it's in a , it's at a trust department , at a bank , yeah , and you're losing what ? Probably two , three percent a year of the assets to , to , to all that . So it's very , very expensive .

Yeah , so you could go down that route if you're out of state and you just want it off your plate , entirely True . So , next thing is to consider a power of attorney in terms of financial power of attorney , so you could actually go to that bank and say here , I'm authorized to sign on my mother's account . Here's the financial power of attorney .

Yeah , I've found that power of attorneys at banks are never straightforward . No , they , they really don't want to do it , but in the end they have to . They have to , yeah , because it's a legal document .

Some will try to push back and they'll say , oh , but we need it on our form and you'll say that ship is sailed . Here's my legal document .

Yeah , I'm presenting it to you because the person's incapacitated , you must take it Right .

So standard ground .

Exactly .

And then the last thing is just communicate regularly , because you know if things change , they're still your parents money , right , and although you're there as a guide and trying to help them , remember it's still their show and so you have to honor their wishes and you can advise them , but it's still you know their money that they've earned over the years and

And that kind of goes into a couple of additional tips we've added . Just be respectful and patient . Yeah , that's really good , so you have to understand that some people don't want help , but they know they need help and this can be difficult conversations , right yeah , this is what's going to change here .

And .

I think that you know , quite honestly , you know , maybe you're just there to listen and understand what's happening , but we have we have a lot of sons and daughters that come with mom and dad to our meetings . Oh , absolutely , and we certainly encourage that .

We don't have anything to hide .

We're not a firm trying to sell anything , and I'll go back to that and I think that's what I'm saying , and and and . Quite honestly , a lot of times they come in very , very defensive .

I guess , is like what are you ?

trying to sell my mom and dad .

You know , a lot of times they become clients too , that's how it happens .

So they make the transition to Wiser after they realize that the person that they're using actually is not not working in their best interest True .

And as children of aging parents , I think you can sometimes be lulled into this false sense of security where you think your parents have it all together .

Right , like you said in the other point earlier , just simplifying you need to get down to one checking account , one bank account . Yeah , you don't need to have 20 accounts everywhere . No , but yeah , and obviously being honest and transparent . So my , we have a family member that was always very conservative .

CDs .

And so it drove . It drove her , her only daughter , crazy . But in the end you have to respect what their wishes were . Yeah , and we've had to get . As interest rates have risen , we can now go back to more CD like things for her .

Right , that's the most important thing , that's the most important part , and they don't know what's happening anyway .

A lot of times very sadly seeking professional help . So a lot of times coming for I feel like parents look at their kids as if they were still 15 .

Yeah , and all these stupid stuff . We did right it never changes .

So sometimes you have to bring in a professional to be kind of , be a mediator and say this is what I think should be happening here , and you might agree with the child . But , coming from a third party . A lot of times they hear it differently .

So Just like your own kids don't listen to you , but if someone else tells them they'll listen .

Yeah , I'm very familiar with that pay hundreds of dollars for coaching and then they're literally telling the same stuff that you already know . That's the way it is Elder care attorneys .

Yeah .

That's very important because there's a lot of things you can do as husband and wife . So if mom and dad are still alive and say dad needs care , there are a lot of things you can do to separate assets out from him onto your mom and that's perfectly legal .

Exactly .

Now , when mom's the last one living , it gets a lot harder . You can't do that anymore . You can't move it to the next generation without a five-year look back . So things get a little more complicated , but don't be spending all your money on the first one to go to the nursing home .

No , exactly . So protect those assets and be careful with joint accounts . And if you're on the joint checking with mom and the way that that gets counted , there's all kinds of pitfalls . And you're right . An elder care attorney all day long will help you , and it's not just at the point where mom needs to go into the home now .

Yeah , there definitely has to be a game plan . It's a little different for each family , depending on the asset level as well , so that's something to pay attention to . Ok , I think we got that covered . Well , Missy , thanks for doing this , and I do have to say one more thing . What's that Today is your one-year anniversary at Wiser Wealth Management .

Yes , it is .

And we are so happy that you're here Now . This is not one year of experience in the business . No , no , you've got more than me . We want to talk about how much that is exactly , but you came in here a year ago and just really took control of planning and I'm forever grateful .

Well , I'm happy to be here .

But yes , we're very happy that you're here . You and Michaela are doing great things in planning and we look forward to seeing her progression under you as well .

Absolutely .

Thanks for listening to today's episode . If you're interested in learning more about Wiser Wealth Management , I want to schedule a consultation to meet with one of our fiduciary financial advisors , like Missy . You can do so by going to wiserinvestor . com or you can click on the link in the episode notes .

Oh great , yeah , I'm about to do mine for my 18-year-old too .

Yes , I emailed Sean and I was like Sean Ethan's 18 . Please prepare all the documents that we need so , if he goes to college , that we have the ability to do things . Hopefully you never have to use a medical directive , but if we did , that's one less pain point right .

Exactly , get it on file .

We also linked the Consumer Affairs study on fraud . So yeah , just communicate with your loved ones , make sure that everyone is doing the right thing financially , help protect your family's legacy .

You got it Communicate .

Thanks , Missy , we'll see you next time .

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