The goal of financial planning is to make sure that your loved one’s money will be managed according to their wishes, if they are unable to manage it themselves, and that their financial resources will cover their medical care and needs as much as possible. Families are understandably reluctant to discuss the issues of financial and legal planning, but by doing nothing, they put themselves at great risk for potential difficulties. It is hard for many of us to imagine a time when we would be unable to manage our regular bill-paying and other financial needs, but for most of us, it will happen sooner or later. Unfortunately, there is no shortage of criminals and scam artists who prey on the trust and vulnerability of seniors.
Financial planning, like health care planning, involves the preparation of documents. A Durable Financial Power of Attorney appoints a representative to manage someone’s finances if they are unable to do so. Trusts are another effective vehicle for the purpose of financial planning and management, and can fulfill other goals regarding tax savings and planning for eligibility for government benefits. Because the regulations for trusts are complex and ever changing, I recommend that you consult an Elderlaw attorney (ELA) to review all trust documents. Just as with health care planning, failure to name a financial power of attorney and/or create a trust may put you at risk of the court’s appointment of a Guardianship of Finances, sometimes called a Conservator.
Also a method of last resort, a Guardianship of Finances will be appointed by a court if needed to safely manage your finances, and it will be costly, intrusive, and inconvenient. It is also wise to use an Elderlaw attorney to draw up your relative’s powers of attorney, to make sure they are done in accordance with state regulations and cover all intended purposes. An Elderlaw attorney can also provide advice regarding reverse mortgages, long-term care insurance, and contracts for continuing care, assisted living, or nursing homes.