335. When Should You Take Over Your Parents' Finances?

There is a moment many families are not prepared for: when the roles begin to shift. One day, your parents are helping you make big financial decisions, and the next, you are wondering whether they need help managing their own money. It is emotional, uncomfortable, and deeply personal, but it is also one of the most important conversations a family can have. In this episode of A Wiser Retirement® Podcast, we unpack one of the hardest financial questions families face: when should you take over your parents’ finances?

Related Podcast Episodes: 

Ep 313. How Can You Help Your Parents Plan Financially for The Future?

Ep 189. Taking Control of Finances for Your Aging Parents

Related Financial Education Videos:

What Does Retirement Look Like for Special Needs Parents?

Social Security Workshop Scams

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Transcript

When Roles Reverse

SPEAKER_06 0:00

No one prepares you for the moment that rules start to reverse. One day you're asking your parents for advice about buying your first house, and then next you're wondering whether they need help managing theirs. Today we're talking about one of the hardest financial decisions families face. When should you take over your parents' finances?

SPEAKER_02 0:17

Welcome to a wiser retirement podcast, where we cut through the noise and bring you real, honest conversations about investing retirement and building lasting wealth. No sales pitches, no gimmicks, just everything your financial advisor won't tell you.

Scams And Cognitive Decline Risks

SPEAKER_06 0:33

Welcome to a wiser retirement podcast. I'm Casey Smith. Today I'm joined with Shauna Theryalt, one of our superstar financial advisors. Today we're discussing when you should take over your parents' finances. Don't forget to just uh subscribe or like or review the podcast wherever you're listening. Let's get started. Hey, Shauna.

SPEAKER_04 0:53

Morning.

SPEAKER_06 0:55

This is uh this is a this is a tough topic, um, I think for a lot of families uh for many reasons. But um I'll throw out a stat first. Uh among the estimated 50 million adults, uh 65 and older in our country, 20% have some form of cognitive impairment.

SPEAKER_03 1:14

That's so scary.

SPEAKER_06 1:15

Uh many of those individuals live alone and they're having difficulty managing their finances, leaving them susceptible to uh mismanagement, according to a new study by the University of Washington.

SPEAKER_03 1:27

I wonder if it's always been that high percentage cognitive impairment.

SPEAKER_06 1:31

Uh I I don't know. I think it's uh we're living longer, but our minds aren't aren't staying. Our bodies are staying, but our minds aren't staying, which is what it seems, but I don't have any data to to support that. What what um what I'll r will reference though is uh a podcast that we did on um these scams that really focus toward adults uh or older adults. Um I did one with Michaela a little while back ago and one one of the most listened to podcasts. Uh it it it kind of shows how bad people take advantage of cognitive decline. Yeah, I I remember right right before we got on this call, my my grandfather called in and a asked uh asked to go see uh go see the doctor. I I care for him remotely. Uh he's he's about an hour and a half north of me and he has people that stay there and help care for him during the daytime. But um that reminds me of a of a situation uh he's always had a d gravel driveway and someone walked up to the door one day and said, Hey, we were working this project and we have all this extra asphalt left. We can pave this driveway for you, and it's a pretty short driveway. And he goes, Well, I mean, that'd be that's awesome, that'd be great. I mean, wow. And they paved it and then they sent him a bill for like six thousand dollars. And so there was, of course, uh, they said there's a contract, they're gonna sue him, all this other stuff. I don't know how it got worked out. It was a long time ago. He was much younger than he's 98 today. But um, but that just as an example of wow, you know, if someone walked to my house and said, Hey, we have a we have extra concrete, we're gonna give you a free driveway, I'd be like, Yeah, no. No, it's like no, thank you. That's not that's not a thing.

SPEAKER_03 3:13

Yeah, but the scammers now are like so much, I mean, they're so much better than I don't know better is the right word, but you know, uh the convincing than they used to be. Like, you know, so I don't I don't know, but they're they're in the business world too.

SPEAKER_06 3:27

I get people all the time reaching out and say, Oh, we can get you uh business loans and blah, blah, blah. And and at one point in my career, I used a guy to help me source uh an SBA loan. And what was interesting there is we had a situation um where he sent me like a bill for$20,000. And I called the bank and I was like, hey, you know, this guy sourced me to you, but I figured you guys paid him a referral fee or some sort. You're right, we don't know who this guy is. We don't we don't know. We thought he maybe he worked with you.

SPEAKER_05 4:00

Wow, wow. Wow.

SPEAKER_06 4:02

So yeah, I I called him and had a not so pleasant conversation for him.

SPEAKER_03 4:06

Uh so do you have cognitive impairment? Yeah, I know.

SPEAKER_06 4:09

Maybe I maybe I have cognitive impairment. I didn't I did not because he didn't get a dime out of us in the end.

SPEAKER_03 4:14

Well, statistically though, as far as far as like a long-term care event, you know, normally if you have a long-term care event, it's like less than a year. And and then if you make it beyond a year, it's two and a half. But then then the longer stays is the five to eight years where you have cognitive impairment. So it's interesting that you say the 20% of them have some form of cognitive impairment. So I wonder if the averages will start changing for long-term care needs too.

SPEAKER_06 4:37

Uh possibly. So why do you think this conversation is so hard to have with your parents?

SPEAKER_03 4:43

Probably because that there's several things. It really depends on the relationship. Like one of the questions I always ask is how is the relationship? Are you close with your mom or your dad? Do you feel comfortable asking them? Because, you know, it depends on what generation they're from. They're very private about money. So I feel like as time changes, I feel like the next generation coming up is not as private about money. So maybe it won't be as hard. Um, so a lot of the older generation are very private and they didn't talk about money. So it was kind of very taboo. And so it was kind of rude to talk, you know, for your children to talk to you about that. Um, so I think that's one of the hardest things. And then I don't, I don't know if they were private because they're not prepared for retirement. So they don't want to talk about that, but or you know, for longer stays or, you know, later years. But the other thing is probably that role reversal too, where it's like you're the parent and you know, it's kind of hard. I've seen it before where it's really hard and challenging for them to admit that they need help too.

SPEAKER_06 5:42

Yeah, and it's also a role reversal. Right. Sometimes I think our parents still see us as those teenagers that made poor decisions. Yeah. And it's hard, it's hard to get rid of that stigma sometimes, right?

SPEAKER_04 5:53

Yeah. Yeah.

SPEAKER_06 5:55

And it'd say, oh, well, my son's now going to make all the all my decisions, financial decisions for me. Yeah.

SPEAKER_03 6:01

That's why sometimes it's good to bring in a financial advisor too, because you you can be like, okay, let's talk about your stain, let's talk about how things are set up. Um, so that way there is a third party helping to facilitate that. And it's not necessarily your family, but they can be present because they're helpful, you know what I mean? They're helpful in it.

SPEAKER_06 6:19

Well, the financial advisor is not making decisions for you. So you still have to have a decision for you.

SPEAKER_03 6:22

Of course. But I'm just saying, like, at least it's not your child telling you how it's supposed to be or what have you.

SPEAKER_06 6:28

Um, so I think that also sibling conflict.

SPEAKER_03 6:31

Yeah.

SPEAKER_06 6:32

So I I this is something that um that I I have seen is it's like everyone's friends and everyone's great. And then as soon as one sibling takes over, it's like, oh, they're trying to take all the money. They're trying to get and you hear stories that they actually sometimes they actually do spend the money.

SPEAKER_03 6:49

So I'll never forget something an attorney told me, and it was really interesting. So it was like, you know, when we talk to clients, we try to tell them, you know, whoever you choose is going to be there. You know, it's it's usually better to choose one child versus multiple if they don't agree. And, you know, typically they don't want to hurt anybody's feelings, but they choose the one that they feel is more financially astute, if you will. And so I've been in situations where a mother declined and there were four children, and she named one of them as financial power of attorney. And I sat at the table, and you know, they were right in front of her, very like, we want to get this gifting and this gifting and this. It was, you know, while she was alive. And the one that was the financial power of attorney was very slow to react, very um, you know, didn't want to do it, knew all the personalities in the room. And an attorney said to me, Don't ever forget that, you know, because all the siblings had this, all this animosity towards him. Yeah. And it was like, don't ever forget that when a someone is within um, they have um cognitive, don't have cognitive impairments, um, that they chose this child to help them for a reason.

SPEAKER_05 8:02

Yeah.

SPEAKER_03 8:02

You know, so the other siblings, and you may be in the middle of this or other family may be in the middle of this, but don't forget that they chose that person for a reason. And, you know, there was a reason when they were of sound mind that they chose that person. And I was like, okay. So you just have to be patient with the family in those regards too. Because I mean, it's a big role on a sibl, you know, but the the parent chose that one for a reason.

SPEAKER_06 8:24

And sometimes it alienates them where the siblings don't talk anymore over things. Yes, it's really hard. Also, too, is you if you're picking someone, you want to pick someone who is also financially stable themselves. Yes. I see really bad things happen when you have a a child who's not stable financially, yeah. Uh take over assets and they've never seen anything that any numbers those big that big before, right? And then sometimes you see bad things, selfish things happen.

SPEAKER_03 8:50

I have seen that too, unfortunately.

SPEAKER_06 8:53

So it is a tough conversation. Um it's uh and also too, I guess for for uh our listeners uh different cultures think of it differently too. Yeah, so you have to be you have to um uh ref kind of respect that uh privacy. But also too, you want to s be in a situation where there's some accountability. Like I've seen long-term care policies expire because the elderly parents just forgot to pay it.

SPEAKER_04 9:23

Yeah.

SPEAKER_06 9:24

And they paid it for all those years and they just forget to pay it, and then all of a sudden they're like they're in a nursing home. It seems like it happens overnight. And then they're oh, we have a policy for this, but they don't expire three years ago because they just forgot to pay it.

SPEAKER_04 9:36

And they get notices and they don't do anything.

Warning Signs It’s Time

SPEAKER_06 9:37

And yeah, those are yeah, which which even with their uh entrance agent that we refer out to, a lot of times I say to try to get that on auto pay. That's a good point. So that so that things like that can't happen. That's a good point. Um, but I guess to back up a second, you know, what are some warning signs that it may be time to step in?

SPEAKER_03 9:56

I mean, it could be things like, you know, not opening their mail, unanswered emails, b things being shut off, payments being duplicated, obviously.

SPEAKER_06 10:06

Water gets cut off when I've seen that.

SPEAKER_03 10:10

Um, you know, maybe even just confusion about money or basic accounts, but I don't know. I mean, then you have some of the things where it's like, you know, you get the phone call or they're calling you multiple times, they don't remember they called you. That's not a good sign.

SPEAKER_05 10:25

Yeah.

SPEAKER_03 10:25

Um, I've had I've had clients call me before and say that they were driving, but they don't remember where they were going. And I was like, oh, and they're calling me. Right.

SPEAKER_06 10:35

You were going home. Here's the difference. Exactly.

SPEAKER_03 10:38

And I was like, and I'm the financial vote. I'm close with them, but it's it was like, okay. Um, so you know, it's uh excessive withdrawals or unusual withdrawals. I, you know, I don't know if a child would see all those things though. So you just have to look for clues about behavior, I guess. Yeah, um, forgetting. And sometimes people will tell you that they're worried because they know that they're starting to forget and they can see it themselves.

SPEAKER_06 11:01

We had one client that her sign it was time to get a lot of help was evidently she was giving, she's a very giving person by default. Yeah. But she was giving ten dollars to everyone that mailed her something asking for money, these organizations. It got so bad that she was getting uh mail dropped off once a week at her house in a bag by the uh postal service. And she was like it was like ten dollars, ten dollars, ten dollars to like thousands of organizations. Most of them probably scams, if I had to guess.

SPEAKER_04 11:34

Yeah.

SPEAKER_06 11:34

Uh and then it got so bad that um somehow she got on somebody's list and they were calling her up, threatening her if she doesn't give more money, then they're gonna come and kill her. And then she got scared and told her son that like, oh my gosh, like all these these people are these people are trying to get me.

SPEAKER_03 11:51

Over ten dollars.

SPEAKER_06 11:53

No, I think it was probably it's probably the same organization, same bad actor, yeah, sending multiple like like they're from multiple places.

SPEAKER_04 12:02

A scammer, yeah.

SPEAKER_06 12:04

And so um, but yeah, it was thousands of um donations that she was giving on a monthly basis. So that that was uh obviously a sign, and that was probably too far in, honestly. Yeah, uh yeah, I I think other thing I I seen elderly clients, I would go to their house and visit with them because maybe they didn't drive anymore. And then one case the the dining room table was just piled up with mail. Just piled with mail. And you can kind of yeah, and and I I would I would I was I kind of stood there and I said, Oh, what's going on with the mail? She's like, Oh, I haven't read that stuff yet. I'm like, that's been here for months. Like it's a big pile.

SPEAKER_05 12:45

Yeah.

SPEAKER_06 12:46

And uh be me being me, I just sat down and I had a uh I had a planning associate with me at the time. He was who we had taken her back home. It was a like a widow's event that we had done. And so I just sat down at the table and his name was Kyle. I said, Kyle, grab a tr grab a trash can. He drives a trash can. I start I just start going through the mail.

SPEAKER_04 13:05

Yeah, helping her.

SPEAKER_06 13:06

And she she starts getting really irritated with me, I can tell, but I'm like, like, if no one's gonna your family's checked out, I know this, like we get we gotta figure this out. Yeah, and then of course I came across a water bill. I was like, when was the last time you paid your water bill? She's she's like, Oh, I don't know. I think I just paid that. And I kept it was like she was within a couple days getting her water cut off, according to the the letters.

SPEAKER_04 13:28

Yeah.

SPEAKER_06 13:28

And so we had stuff we had to pay, we had tons of junk mail. Yeah. And um so I started visiting her like once a month until uh until she passed away. But I that's I had to do that every time. I would just go through the mail.

SPEAKER_04 13:42

Yeah, and help her out.

SPEAKER_06 13:43

Yeah, one time it was electricity. So those are those are things that you have to um you have to kind of insert yourself in that situation like that as a child because they're not pro they're probably not gonna ask for help. Maybe mom, yeah, probably never dad. You know.

SPEAKER_03 14:00

Well, and listeners, if you're hearing this, it's like this is, you know, and this is what we try to instill to our clients. It's like you we want you to make these decisions before you have any incognito cognitive issues. And so it's like be thinking about this, don't wait. This is really to protect you from yourself, too. Yeah, because really, by the time someone actually needs help or they're having memory issues, a lot of times they're like, I don't need help. And if you haven't named somebody or you put it challengingly in like your financial power of attorney that you have to have that it's it's springing, meaning you have to have two doctors' nodes and whatever, a lot of the yeah, a lot of those individuals will be like, I don't need to go to the doctor, I'm fine. You know, I don't need help, I'm fine. And meanwhile, they're double paying bills or writing checks or leaving stuff out or not filing their. I've seen so many cases where they're not filing their taxes at all.

SPEAKER_05 14:48

Yeah.

SPEAKER_03 14:49

Because they can't pull it all together and then they forget, or they it's just too much of a burden to pull the documents together. And so they just don't for years.

SPEAKER_05 14:57

Yeah.

SPEAKER_03 14:57

Um, so then you have to catch that back up. So, you know, that's where I I try to tell clients this is to protect you from yourself so that you're making these decisions when you're of sound mind and you know, don't make it so challenging that people can't step in and help.

SPEAKER_06 15:13

Yeah.

SPEAKER_03 15:14

You know, sure. Um yeah.

A Spectrum Of Support Options

SPEAKER_06 15:16

I I mean there's other things that are, I think, more obvious, uh, dementia related diagnosis, hop hospitalization for an extended time period. I mean, that there's some basic things there that you would make sure that that are getting paid. Um, if a spouse passes their spouse passes away, especially the one that handled all the finances, then the surviving spouse is definitely gonna need someone to kind of look over their shoulder and and and help them, uh for sure. Um you know, also uh, you know, let's talk about what the like the what the spectrum of support is. So you we just talked about everything on our examples of someone just taking over.

SPEAKER_04 15:53

Right.

SPEAKER_06 15:53

But there's also just you know, bringing or going to meetings with their financial advisor, yeah, and sitting in on the meeting and just listening. Yeah, um, I I I encourage that uh when when I think that it's it's certainly necessary with the parent, even with the child, I don't even know the child is right, but as I get older and I I or as they get older and they see that they're leaning more and more on everything that I say, uh, I believe that I'm I'm biased. I created an unbiased firm, but I I want some checks and balances here. Uh, and so that's that's where I love to have the the children come in. We have to do a little convincing sometimes because they think that we just sell insurance and everything else. We don't do we we don't sell any products, right? So it takes a little uh kind of win the whole family's trust. But once you do that and they see that you're a fiduciary and you're fee only um and you're working in the best interest of the family, they um uh everyone's kind of on the same page moving forward.

SPEAKER_03 16:53

I mean, many times clients even ask me at what point should I bring in my kids? And I'm like, well, whatever you feel comfortable with. But a lot of times it's a good conversation to have. You know, sometimes we even start slowly where we're not even talking about balances. We they just bring them in to meet us, and this is what we do for your parents or your parent. Um, you know, this is who we are. So that way they know. And then once they're starting, maybe to want them to come in and step. I've had many parents that just go ahead and engage their kids, not to take over fully. They're still signing their account applications, they're still talking to us, they're still, but like copy them on the emails, let's bring them into the meetings so they can kind of see what we do and how we manage things together as a team. And, you know, that starts the trust and the relationship, but that's not what it's for. I mean, that's helpful, but it's really to let the parents bring someone in so that way, you know, the child or the future financial power of attorney knows their situation and knows what's going on.

SPEAKER_06 17:52

And and it may not be a best fit for everybody. I have two families that were here for uh a very long time until they passed away. But they uh they had one family that uh that one of the children was upset. He thought there'd be more money. And maybe they had plenty to cover for themselves, but I guess he was banking on this large inheritance and it wasn't as much money as he thought it was gonna be. As an advisor, you don't want to reach across the table and slap them in the face, but but you restrain yourself and you're like, what is wrong with you? Like this is about your parents, it's not about you. Like you've had your own career to go save money, you chose not to. Uh, and then I have I've had uh uh another situation where when one particular child found out the resources within about a year he was asking for an inheritance early. He booked an appointment just with me, sat in my office and said, Um, my other siblings are not as good in good health as me. Um or are my I'm not as good health as my siblings. And uh I believe that I should get my full share and I want mom to transfer me everything now.

SPEAKER_03 19:05

That's so inappropriate. I think. I mean, of course we don't tell them anything. We can listen to them and talk to them, but we're not gonna be like, let's figure out how we can just convince your parents to like, you know, it's like I'm pretty sure this is a parable in the Bible.

SPEAKER_05 19:20

That's interesting.

SPEAKER_06 19:22

So uh maybe not in parable. I think it was actually a story, but um, but anyway, I I was a little shocked um by that to say the least. And of course, I have to report back to mom. And um she just wanted everybody to be happy. So we we had to do something to appease appease that child, interesting, which is very frustrating uh from my from my standpoint of like, oh my gosh, like hopefully she doesn't outlive her resources. But um, but anyway, well, I don't know.

SPEAKER_03 19:47

Yeah, I mean, our my our job is to say, like, okay, what are they wanting to do? Not the children, but the family. And it's like, how can we make this cohesive and but a bit first and foremost, like you are our client.

SPEAKER_06 19:57

So I had lots of opinions in that scenario. So what what what I always did before any meeting is I just simply sat there and I said, Okay, I have to remove all my opinions on this and I have to focus on facts. And so, how do I how can I give her facts for her to make her own decision? Yeah, and she would look at me and she's like, What do you think I should do? I said, My job is to give you facts, your job is to make the decisions. And so if I'm making the decisions, that's putting me in a whole different role of which I'm not here to, I'm not here to do.

SPEAKER_03 20:28

Sometimes I take those times to do storytelling and say, Well, I had a client once, or you know what I mean? So that way because that's where you derive our opinions, right? It's like things that we've seen, and it's like, well, I've seen this, but I've also seen this. I can like pros and cons, and then things that I've seen throughout different relationships or family dynamics without obviously being too personal that you would know who it is. Right. Um, and so just kind of give examples of like pros and cons. It could go this way or this way, and let's just make the best decision we can. But if that's truly something they want, I try to make it work, but I can't make the numbers what they're not. And I'll tell you that obviously, but you know, there's pros and cons to everything.

SPEAKER_06 21:06

I mean, I feel like in a wealth managed firm, the numbers are usually pretty good.

SPEAKER_03 21:09

Yeah. From where we sit.

SPEAKER_06 21:11

We're not trying to help somebody, you know, get food stamps or anything. But no, uh, it's poor opposite of that. Uh, it's just uh dealing with the family, the family dynamics and what people's assumption of money, which kind of goes back to podcasts we've done in the past about if you have young children or even children in their 20s, you need to take the time and educate them about your story and how those resources came about and then help them understand how to manage money. Yeah, it's so important. Um, we're just not we're not teaching it in schools and and families aren't aren't doing that legacy portion of their own.

SPEAKER_01 21:46

We have to teach them how to fish.

SPEAKER_06 21:47

Yeah, exactly. Exactly.

SPEAKER_01 21:51

Quick check in. Have you thought about the legacy you'll leave behind? Download seven steps to leave a financial legacy, a free guide. Guide from Wiser Wealth Management to learn more. It's not just about wealth, it's about leaving a lasting impact. Go to wiserinvestor.com forward slash guides to download your free guide today. Now let's jump back into the episode.

SPEAKER_03 22:24

You can just be like power, you can do view only on some accounts.

How To Start The Conversation

SPEAKER_06 22:28

View only bank accounts. We just kind of see what's happening. Uh obviously, you could activate your power of attorney if if the document is set up for that. Uh and then um there's the taking like full financial control. So that's kind of the whole spectrum of it. Uh so going back to okay, we've decided that something mom or dad needs help. Uh, how do we start that conversation? I'll tell you exactly how not to start it. I've had clients had one little hiccup, goes in for a routine surgery, and I've got six people hitting up my phone, you know, every single week going, we got to take over dad's money. We got to take over dad's money. It's like it was a routine procedure. Like he's gonna be fine. Yeah, you know, it's it's it's it's it's uh uh really everybody was just kind of fishing for that. It was a large estate. Everyone's just kind of fishing for how much money was actually there. And ultimately, uh there was an orderly conversation about everything, and the family got got uh everybody got on the right page, but uh I would avoid doing it in the middle of a crisis.

SPEAKER_03 23:31

Yeah, no, definitely.

SPEAKER_06 23:33

Right.

SPEAKER_03 23:34

That's why the a plan up front is important, so you're not doing it in the middle of a crisis, right?

SPEAKER_06 23:39

And don't run holidays.

SPEAKER_03 23:41

Don't run not during holidays, don't everybody's together.

SPEAKER_06 23:45

Don't do for Christmas. I mean, just let that be what that is, but conduct business on a different day. Yeah. You don't conduct business on Thanksgiving or Christmas.

SPEAKER_03 23:52

Yeah, no. Well, and it's also like how do you frame it too? Um, you know, not not saying you can't handle this anymore, or you know, um don't be accusatory or don't be rude.

SPEAKER_06 24:04

Right.

SPEAKER_03 24:04

It's more of I just want to make sure everything's in, you know, good order. And a lot of times it's easy, easier to start that conversation if you or a family member has gone through where they have, you know, taken care of a family's estate. Um that's actually when it comes up the most. It's like people come in here and go, okay, I'm dealing with my mother's estate or my father's estate, or and they did it beautifully, or it was a mess, and I don't want to do this to my kids. Or, you know, I think sometimes, you know, if they've handled something like that, it makes them think about it.

SPEAKER_06 24:36

Yeah, I think uh something along the lines of can we put a plan in place so I can support you if something happens unxpectedly. I think that's probably a good way to start the conversation. Uh, I would make it about planning, not about competent competence. No one wants to be told that they're not competent anymore. Like no one really wants to hear that. But I need to say, look, mom or dad, there's a lot of scams out there right now. And there's a lot of uh even even uh perfectly registered brokers. Uh we've seen we've seen that. The client's suitable for something, but doesn't mean they should have it. Like your your 75-year-old mom doesn't be need to be buying annuities.

SPEAKER_04 25:16

No. Right. I'm just so against annuities.

SPEAKER_06 25:19

But they can uh but they can sell it to them, and the next thing you know, your money is locked up, and now when you when they pass away, you you could have a taxable event unnecessarily.

SPEAKER_03 25:28

Yeah.

SPEAKER_06 25:28

So it it um you want to protect them from our own industry, unfortunately. Um, especially in in the sales, the sales side of our industry. They're they're kind of ruthless when it comes to that. Although technically, uh a life insurance annuity salesman now is supposed to be under a fiduciary standard.

SPEAKER_04 25:46

How?

SPEAKER_06 25:46

Uh if they're if they're operating under um if they're a registered investment advisor also.

SPEAKER_04 25:53

Okay.

SPEAKER_06 25:54

So that's something that has been changed where if they're like us, but they also sell annuity. So they're not fee-only, they're fee-based. They're supposed to be fiduciary all the way through the relationship.

SPEAKER_03 26:03

Really? Not just switch hats.

SPEAKER_06 26:05

Yes. Uh that's a kind of a new thing.

SPEAKER_03 26:07

Okay. Um, because it used to be whatever hat they're wearing at the time, right?

SPEAKER_06 26:11

Yes, correct. So that has changed, but uh, if you go down to your your um your local broker, you know, a Wells Fargo, somebody like that, um, they're still under the suitability rules. There's no fiduciary duty there whatsoever. So that's just you have to be careful where your parents are getting advice from. Uh, because again, I see how our clients lean into us and we now we're what we say is gold, uh, especially as they get older, and we've earned that trust. Yeah, these are long-term relationships.

SPEAKER_03 26:42

Well, we've shown them we we're not but the same thing can happen.

SPEAKER_06 26:45

These aren't evil people at broker dealers. They're people just like us who drink the company Kool-Aid and think that all these products are the solution to everything. So they're if you want your parents leaning into somebody like that, that's where you need to stop in and say, I don't know, this is the best interest of my parents. Right. Uh I again, uh, I would emphasize being prepared for something that could happen. Uh, I would include siblings pretty early. You want to avoid secrecy, you want to create transparency, you want to document the decisions that you're making if you're a part of an attorney why you did it. Uh, I mean, for in my in my case, even my own family, uh, we have a situation that might might require uh some changes and and and finances uh for uh even for my own grandfather, but I want to communicate that across everybody that's uh that's affected by it. Yeah. Um to make sure that everybody's on the on the same page as to why we're doing what we're doing. Yeah. Uh so anyway, uh those are you you just want to ease uh ease into it and tell them that you're that you're there for for them. Uh now if you have a uh you know a black sheep in the family and and it's gonna they're gonna cause problems, there may there may be no way to avoid that. Um being and being transparent might be worse. So you kind of have to look at your situation. Yeah. But I would say for normal families, I would say you want to be very transparent as to why you're doing what you're doing.

SPEAKER_04 28:05

Yeah.

Essential Legal Documents To Have

SPEAKER_06 28:06

Uh all right. So let's get into legal and practical steps. So there's some essential documents, Shauna, which you're really good at talking about. So what are some essential documents that every family needs to have?

SPEAKER_03 28:17

Absolutely. Yeah, Arune and I have gone through this on other shows as well, but your durable financial power of attorney is very important, a healthcare power of attorney, also known as advanced directive, um, a will or a trust. So, or both, um, just depending on if you want to avoid probate, et cetera, beneficiary designations, making sure they're all up to date because you can have an ironclad will, but depends how the assets are titled and how beneficiary designations are. You know, is your plan actually doing what you want it to do? Um, that's really important to look at. And then the HIPAA authorization, but typically that's included under the healthcare power of attorney as like a standard form as well, just to get information for healthcare. Now, your people that you designate on them on these documents don't all have to be the same. You know, usually an attorney will mention, I'm not an attorney, but they'll say it with a financial power of attorney. You may want to name one just to make it simpler. Um healthcare power of attorney, a lot of times you may name multiple children to help you. And usually you name spouse and then children. Um, you know, typically is how it works as backup. Um, you know, healthcare power of attorney, even if you just name one, they usually consult each other, you know, not always with financial, sometimes they do. Um you know, like you said, the transparency is good, but it depends on the family dynamics. Um, you can have somebody that is the executor of the will that's different than your financial power of attorney. And so, you know, or trusts, etc. Um, but anything that has a beneficiary designation is not going to be controlled, you know, by the executor anyway. So that's that's a misnomer. They think that I'm the executor of the will. Well, well, if you have an IRA account that has beneficiaries listed, they have no control over that.

SPEAKER_04 30:03

Yeah.

SPEAKER_03 30:04

So, you know, at any rate, just making sure all of these are in order and the titling of your assets are correct and following along with what your state plan is saying.

SPEAKER_05 30:14

Yeah.

SPEAKER_03 30:14

So I that's very important. And definitely have a professional look at that. Um, some of them are simple and it's not, you know, very complex, but some of them can be more complex even if they seem simple. Um, so that's important. And understanding if you have real property out of state, how that's titled, how that's passing, etc. Because that's a little bit different as well.

SPEAKER_06 30:37

With our clients as they age, I I tried to get them to get into like one checking, one savings, maybe a high yield savings, but that's it. Consolidate. Accounts everywhere is yes. Yes, yeah, accounts everywhere is is a is a nightmare. You you need to consolidate, consolidate, consolidate.

SPEAKER_03 30:54

Well, if someone steps in to be financial power of attorney, they have to figure out how to manage all this. But then when they pass away, you have to go to each institution and each account and deal with each one individually. And so if you're grieving the loss of your spouse or your parent, right? That's can be a watt to undertake.

SPEAKER_06 31:11

I would argue that um maybe maybe it's better even to give away the high yield savings account and just keep everything in one bank.

SPEAKER_03 31:17

Um yeah, as long as you're under FDIC, obviously. Yes.

SPEAKER_06 31:20

Uh, I think that that's um that just makes everything so easy. One broker, we use Charles Schwab. Everything's at Charles Schwab. Yeah. You can even keep cash at Charles Schwab if you need it to. Yeah. Uh so just just make it just make it easy um with with accounts, but have a list of accounts. That's always good. Password management plan. Your parents probably don't have a one password or a last pass account. It's probably a book somewhere. Don't throw it away.

SPEAKER_05 31:42

Yeah.

SPEAKER_06 31:43

Right. So so uh you want you want to have some type of a password management plan. And then I would set up um auto pay for essential bills. Uh, even my own mom, who's probably listening to this podcast. Hi, mom. Uh, she, you know, with her bills, I set up auto pay. So I have a I have a checking account that's just for paying bills, and the money goes in there and it automatically comes out every month for all the essentials. Yeah. And you can monitor that. Um, I typically look in maybe once a quarter just to make sure everything makes sense. Yeah. Right. Yeah. And then she has a separate account that's more for her her spending money. So she doesn't have to worry about running out of money. Yeah. If she does, then she's it's her likes are gonna stay on. Right. Right. So it's just a real simple system of of of setting up uh bill pay. Um, fraud protection. This is something I haven't done with my family yet. I probably should do, but you get to a point where you don't need credit anymore, you should really just turn your credit off or freeze it, right?

SPEAKER_03 32:37

Or freeze it.

SPEAKER_06 32:38

Yeah, yeah. Yeah. Freeze credit. Uh that's gonna save you a lot of trouble for identity theft. Um, I was, you know, I I love our clients. Uh, I I would say I put it this way, I'd work for any of our clients on a weekend. However, we have the best clients in the world because they respect my weekends. Yeah, does that make sense? Yeah. So I'm sitting in a movie theater with my kids. This has been many years ago now, and the phone rings as one of our widow clients. And I'm looking down at my phone going, she would not call me on a Saturday night unless it was because it was unimportant. So I stepped out and I answered the phone and she says, Casey, I've done something terrible. I said, What? She goes, Well, this guy called me. He says, Ma'am, I'm sorry. Um, we were just talking a minute ago and I didn't get your social security number. Can I get your social security number? And she goes, I gave it to him. And I started thinking about it. I haven't talked to anybody all day.

SPEAKER_04 33:27

Oh, wow.

SPEAKER_06 33:29

It was uh a shyster. So I was like, I sat there on this little bench outside AMC theater going, Okay, what are we gonna do? And then it's like Life Lock. We're gonna turn on Life Lock and then we're gonna we're gonna shut our car credit off through Life Lock. And so I signed her up for Life Lock right there and then got her get her uh her credit turned off. And so nothing bad ever came of that because we reacted so fast.

SPEAKER_04 33:53

Yeah.

SPEAKER_06 33:54

But um, but yeah, those are the kind of things that maybe we could have gotten ahead of if we told all of our clients that, hey, at a certain age, you're not buying a house anymore, you're debt-free. Like, what do you need credit for? Freeze it. Let's just let's just freeze it. Um, trusted contact on investment accounts. That's important. That's something we're doing. Any single person at our firm uh over the age of 65, we ask for a trusted contact. And it's not to get access to your account necessarily or make any decisions for you.

SPEAKER_03 34:20

No, it's it's not a legal power of attorney.

Fraud Protection And Trusted Contacts

SPEAKER_06 34:23

Yeah, it's like to hey, Mary called me and she didn't seem quite right, or she seemed under duress, or she's been making some excessive withdrawals, which are not normal. Is she okay? Yeah. Can you check on her for me? Yeah. Just make sure everything seems seems okay. Yeah. Go to go visit her at her home. Yeah. Um that's that's what that's for, is just to make sure that we're um we can look out for someone and and stop something bad from from happening. Uh funny story, I had a client a long time ago that um uh was spending a lot of money at casinos and she was 80 years old and she had found a boyfriend that was like 25 years younger than her. And she wasn't 80, but she's probably in her 70s.

SPEAKER_05 35:07

Yeah.

SPEAKER_06 35:08

And I was like, is this fraud? You know, I started thinking, is this elder abuse? I started looking into it. I mean, if she's lucid and she never was like, she was perfectly lucid. And I'm not fun. I sat there and I was like, Well, if it was a 75-year-old man with a 25-year-old younger girlfriend, we'd be like, good for him, right?

SPEAKER_03 35:27

Why is it always the opposite for the girl?

SPEAKER_06 35:29

Always the opposite for the woman. So we just we just kind of watched in in awe as uh that whole thing kind of played itself out.

SPEAKER_03 35:37

I mean, they know what they're doing and it makes them happy. I don't know.

SPEAKER_06 35:40

It didn't it didn't make her family very happy, but um we we we did that's always a sticky situation.

SPEAKER_03 35:46

That's such a hard situation. It's like are they lucid? You know, I don't know.

SPEAKER_06 35:50

We did we we we did some checking and I don't know, I don't think he was full outright honest, honestly. But who is in that situation? Didn't have a job, is living off her money.

SPEAKER_03 36:00

That's so hard.

SPEAKER_06 36:01

So so yeah, but she I I was able to get her by herself several times. I'm like, this is what's happening, or is this what you want? And she was like, absolutely. Okay, it's like okay. Um so when do we involve professionals? So financial advisors, uh, the good ones are probably checking in once or twice a year. Um, can I can see what the big picture looks like? So that that's healthy. An elder law attorney, I I don't think we really get them involved until uh we have assets that we want to shelter because there's an event or we want to protect from an event. Yeah. So that's not like a regular that's not a regular. That's a specialized field. Yeah, it's a very specialized thing. Uh obviously your CPA should be preparing uh taxes for them and looking for tax deductibility of any healthcare events that come up. Uh, you know, I will say this. Uh I we have a client here, I think she's kind of famous now, but we she doesn't have any family. She doesn't she doesn't have uh uh husband passed away, had no children, and I don't think she has any first nieces or nephews or all second or third removed. So she exhibited a lot of these signs. And us as a firm had to kind of like step in and adopt her. We've like physically moved her twice. Um she has some mental disabilities as well, and we've been able to care for her. But here's what I've learned in the process there there's uh geriatric care. So we hired a lady and she goes to all the doctor's appointments with this with this client, and she makes sure that assisted living is giving the right meds. She coordinates the meds between the psychiatrist and the primary care physician.

SPEAKER_04 37:46

Yeah.

SPEAKER_06 37:46

Uh so there's people out there that will do this for you for an hourly rate. Uh it's$152 an hour, is what the um uh most of these firms or groups charge. And these are these are licensed nurses that have additional certifications, and they're like the gatekeepers for everything.

SPEAKER_03 38:03

So it's like a care manager type situation.

SPEAKER_06 38:06

Yeah, not a person who sits in a house with her, right? Right. That's that's the so like the visiting angels people, they can't really do anything nurse-wise, they can't even touch a catheter. Um, they just they're just there to sit and give companionship. Yeah. Right.

SPEAKER_04 38:22

Yeah.

SPEAKER_06 38:22

Uh so we so we we did that, and then I found a group uh that that does bill pay. So so now this uh this group makes sure's make they're bonded, sure. They're this lady here happens to be a CPA. Uh most of them I found were not. Uh you don't need to be a CPA to do this.

SPEAKER_03 38:42

But she has actually I know it's another layer of background checks if they're a CPA, I suppose.

SPEAKER_06 38:47

Yeah, yeah. And she charges a little more for it too. So some people may not want to pay for that additional um additional care, I guess. But yeah, she monitors the bills and the income and makes sure everything gets paid. Uh so there's there are services out there like these two that can make your job a whole lot easier if you're if you're caring for a non-family member or a distant family member.

SPEAKER_03 39:07

As a power of attorney.

SPEAKER_06 39:08

Yeah, as a power of attorney, exactly.

SPEAKER_04 39:10

That's interesting.

SPEAKER_06 39:11

So and then what I we do is coordinate with her financial power of attorney and a very long story, but I ended up being the um I ended up being the healthcare power of attorney because people bowed out. I was like deep down the list.

SPEAKER_04 39:24

Yeah.

SPEAKER_06 39:24

People are like, no, you don't want to do it. So we I I kind of watch over her health and make with this care manager, making sure that she's gonna be okay.

SPEAKER_04 39:33

Yeah.

SPEAKER_06 39:34

Um, but the financial stuff is the day-to-day stuff is completely out of our hands. And so now there's checks and balances. We have a third party that that accesses has access to her funds we don't, other than managing assets, right?

SPEAKER_04 39:46

Yeah.

When To Bring In Professionals

SPEAKER_06 39:46

And then um we have meetings and making sure that that we're not gonna run out of money. So there's lots of uh uh programs out there that uh like that that make this all the stuff a lot easier if you're a busy professional and don't have the time to to figure these things out.

SPEAKER_04 40:01

Yeah, that's good to know for sure.

SPEAKER_06 40:04

So um just quickly some emotional considerations. Uh you know, you gotta expect resistance when you do this. You've gotta try to preserve their dignity where possible. Uh the only thing worse than this is probably taking away somebody's car who does who won't give up their car, honestly. Uh focus on on being collaborative with them. Uh don't just walk in and say, I'm taking over and you're nobody now.

SPEAKER_03 40:29

Like include them in the decision.

SPEAKER_06 40:30

They've been independent probably their whole lives, and you have to understand that that it's going to be very humbling if you're sitting on the other side of that. Uh when shouldn't you take over? If you just see minor mistakes, but there's really no pattern to that, I probably wouldn't worry. You know, they accidentally paid the the uh electric bill twice, or they didn't they missed it one time, one month, and oh my gosh, here's you know, one time probably there's probably not a real issue there. Yeah. Uh temporary health issues. So they have surgery, they're just recovering. Uh that might honestly they might approach you and say, hey, I was thinking while I was out. Um sibling power struggles, sometimes maybe it's not worth it if it's gonna be an all-out war with a sibling. So you kind of have to think you have to think through that. That might be where you get professional uh help who can handle things like that. Um and also your own financial instability. So if you're if if you're having trouble making paying your own bills, you probably should find someone else in the family to help if if there is someone. And the reason why I say that is we're all human, and so if we're struggling and we need to go get an extra dollar, maybe you pull it from mom's this month and you'll pay her back. Maybe pull it from mom's next month. So you can skip that whole temptation by just focusing on you and then let someone else step in and take care of uh the parents.

SPEAKER_03 41:55

Well, let's not also forget you're a fiduciary legally, and you can be sued if you're doing the wrong thing too.

SPEAKER_06 42:00

Yeah, that's a very good point. Yeah.

SPEAKER_03 42:01

Very good point. I mean, if you're not doing the right thing, the others can sue you if you're not acting as a fiduciary in that capacity.

SPEAKER_06 42:10

So look for patterns, uh, not one-off mistakes, start the conversation early, use legal protections proactively. Uh gradual gradual support is typically best. Uh, help them keep their dignity, uh, keep transparency front and center. And uh, I think the call to action here is before you while they're still lucid and and everything's fine, do we have all those legal documents in place that you you discuss? Are they are they current? Do they name people that aren't with us anymore? Uh as far as um uh as far as uh power as attorney and things of that nature that would create a problem. And when clients ask or have situations changed.

SPEAKER_03 42:48

Yeah. And when clients ask, you know, how do I have this conversation with my parents or they have this situation? I'm like, tell me about it, and I'll help I will help direct them on how to talk about it. So if you have that situation, you have an advisor, you need an advisor, um, you know, typically I will help direct how to have that conversation and maybe maybe empower them a little bit to feel more confident to have that conversation too. So you may want to ask your own advisor or find an advisor that can help you as well.

SPEAKER_06 43:15

Yep. Uh, we have a few other podcasts related to this. Episode 313, how can you help your parents plan financially for the future? Uh, that's a great one that kind of dives a little more deeply into the estate planning side. And then uh we did this episode uh a long time ago, episode 189, Take Control of Finances for Your Aging Parents, is kind of a uh a little bit of a repeat of this one. Um, we have a couple of videos we've popped up as well social security workshop scams, uh, and also uh what does retirement look like for special needs parents? Or yeah, so that is um uh that that is all linked into our show notes. Uh thanks for listening today's episode. If you have any uh questions or comments, please feel feel free. To reach out to us. If you want to uh book an appointment with one of our financial advisors, you can do so at wiserinvestor.com. Thank you, Shauna.

SPEAKER_00 44:07

Thank you.

SPEAKER_06 44:07

And we'll see you guys uh next week.

Emotional Boundaries And When Not To

SPEAKER_00 44:10

Thanks for listening to a Wiser Retirement Podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wiserinvestor.com and reach out. This podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets, or any other investment vehicles, or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investor advisor with the SEC. The host and or guests may personally own securities, digital assets, or other investment vehicles mentioned on this podcast. Neither the host nor guests of the show are compensated for their participation, and no referral fees are paid to or received by any host or guest for clients, listeners, or similar interests. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional, andor legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.