Boom I Bloom Asset Management
Helping Our
A
s the baby boomer generation
approaches retirement age, most
are concerned about whether
their pension and investment portfolio
will be sufficient to maintain their
lifestyle during retirement. However,
many baby boomers also have to worry
about helping their aging parents with
their estate and financial planning, and
that may mean taking a more hands-on
approach to managing their financial
affairs.
If your parents are getting to the age
where they could use some help, here
are some "to do's" you should consider
to ensure their affairs are in order:
Review your parent's estate plan.
An up-to-date estate plan is vital to
ensure that your parents' assets will
be distributed to the individuals or
charities they select.
At a minimum, they should have
a will, or perhaps a trust. A trust has
several advantages to a will (for example,
administration of estate is normally
easier and less expensive). However,
setting up a trust is more expensive than
setting up a will. If prepared properly, a
trust will avoid probate, which is usually
much more expensive (as well as time-
consuming) than the cost of establishing
a trust.
It is also important to have updated
medical and durable powers of attorney
to enable you to pay your parents' bills
and make medical decisions when they
can no longer do it themselves.
Get a handle on their financial
affairs.
Now is the time to find out where all
your parents' accounts reside, including
banks, investments and mortgages, and
to get information on their life insurance,
medical insurance and long-term care
policies.
If your parents are unable to handle
their own financial matters, a general
durable power of attorney or trust will
12
BOOM Magazine • February 2013
Tips for baby boomers to help aging parents
with financial and estate planning.
allow you to assist them with
income funds to ensure they won't
their financial affairs.
run out of money before they die.
However, there are
With the cost of living and health
situations where a broader
care sure to increase in the coming
approach is necessary. If
years, retirees need more income for
a parent were unable to
the future, not less or the same.
manage his or her own
With the chances that your
affairs due to legal incapacity,
parents will live longer, they may
By Ken Bloom ,JD, also need long-term care in a nursing
such as a physical or mental
home or assisted living facility. If
illness, a conservatorship may L.L.M.
be established.
your parents have a long-term care
insurance policy, it is important to find
In a conservatorship, a person is
appointed by the court to manage the
out the terms, such as when does the
incapacitated person's financial affairs.
policy pay benefits and how much. You
Because a conservatorship is established
should also take time now to look at the
through the probate court, it can be
various long-term care insurance options
and potential facilities that can provide
expensive and usually is used as a last
resort.
assistance for your parents in the event
you are unable to take care of them
Make sure bills are being paid.
yourself.
As parents age, they can become
forgetful and fail to pay their bills. You
Get to know their professional
should do an inventory of their monthly
advisers.
Attorneys, doctors, investment advisers
bills to make sure things are being paid
on time. It is better to be proactive
and insurance agents are people your
rather than wait to find out their
parents often trust for advice. But when
homeowners insurance was canceled
they start to lose their physical and
because they forgot to pay it.
mental capabilities as they age, the
responsibility of working with these
Living longer means revised
professionals falls to you. Now is a great
investment, long-term care
time to get to know these advisers and
strategies.
discuss your parents' current situation so
According to the U.S. Census Bureau, life
you can help them make good decisions
expectancy at age 65 is approximately
in the future.
18 years; at age 75, it is 11 years. While
Certainly, baby boomers are often
it is great news that people are living
caught in the middle of planning their
longer, there are serious investment
own retirement while worrying about
ramifications. Increased life expectancies
their parents. However, by spending
require a different approach to
some time now to do due diligence in
retirement portfolios to assure that your
areas of estate and financial planning
and long-term care, it will greatly reduce
parents do not run out of money.
Often, retirees get nervous about
your stress should your parents take a
the ups and downs of the market and
turn for the worse. ❑
become too conservative with their
investments. They lean heavily on fixed-
Ken Bloom is an attorney, financial adviser
and tax expert and is a partner in Bloom Asset
income investments such as CDs, bonds
Management and in the law firm of Bloom, Bloom
and fixed annuities.
& Associates, specializing in business, taxation
But today, with people living much
and estate planning. Contact him at (248) 932-
longer, their investments need to focus
5200 or at Ken@bloomassetmanagement.com .
on some growth equities as well as fixed-