4 Steps to Ensure Your Parents’ Finances Are Secure

Are you struggling to find the right financial advice for your aging parents? Do you feel overwhelmed by conflicting guidance from CPAs, attorneys, and financial advisors? You're not alone. Many families are in your shoes, seeking the right expertise to ensure their loved ones' financial security and ultimately their legacy.

Understanding the Challenge

Your elderly parent, like many others, may have a substantial net worth, but managing their estate effectively requires more than just basic financial advice. Let’s walk through the critical issues to be aware of and actions to take in order to ensure your parent’s affairs are managed effectively, safeguarding their present way of life while maximizing their legacy and your peace of mind.

The Problem with Most Advisors

Despite their wealth, many elderly individuals receive mediocre advice, leading to inefficient tax planning and a lack of proactive estate management. There is a myriad of reasons for this: Things like compliance saying they are not allowed to give tax advice, or something as simple as not having the team of professionals that can truly give the advice that’s needed. It’s crucial to evaluate and upgrade their advisory team to ensure comprehensive financial health.

Step 1:Evaluate the Current Team

Financial Advisor

A competent financial advisor should do more than just manage investments; they should understand your parents’ tax situation, have a few strategies to not only minimize taxes every year but also the lifetime tax burden, including after they are gone. Understanding how the different pieces of the financial plan interact with one another is the only way to ensure long-term financial health. Look for an advisor who specializes in comprehensive financial planning covering the Five Pillars of Holistic Wealth Management. 

Action: Interview the current financial advisor and see if they can integrate investment management with tax planning. If not, you may want to start searching for a new advisor with a more holistic approach.

CPA (Certified Public Accountant)

A skilled CPA should work together with your financial advisor to create detailed tax strategies, including managing realized gains, charitable donations, and other tax-saving opportunities.

Action: Hire a CPA with a strong background in tax planning and is willing to work with other professionals on your behalf, not someone who will simply file a return every April.   

Estate Attorney

The most important thing about an attorney is that they are NOT A Generalist! Estate planning is very, very complex with a lot of moving parts. You want an attorney that works only in this subfield of law. An effective estate attorney is essential for providing guidance on tax minimization and trust management.

Action: Seek recommendations from your financial advisor and CPA or interview several candidates to find an estate attorney who is transparent and offers clear strategies to reduce estate taxes.

Step 2: Implement Strategic Planning

After you find the right team and have them in place, now it’s time to get to work. You must first identify if there are any shortfalls in the current plan. Work with your team of experts to first assess the current situation along with any goals, wants, or needs. Then you can start to build out a plan that works better for your parents – with their input, of course!

You may have to create income streams, potentially reposition some investments for tax efficiency, set up trusts, and insurances, and really satisfy the immediate needs but then you can start the fun stuff! Things like gifting and charitable donations. Again, the whole goal is to build out a plan that will provide for your parents, protect their assets, and align with their wishes.

Step 3: Regularly Review and Adjust the Plan

Every aspect of financial planning requires ongoing review and adjustment to adapt to changing tax laws and personal circumstances. Your advisor should be having regular conversations with you and your parents not only at predetermined intervals but also anytime there are changes happening in the world that may affect your plan. We have some clients with very complex situations where we meet every month and others that we meet with less often – it really depends on your specific situation and what you want.

Action: Schedule regular check-ins with the financial planner, CPA, and estate lawyer. At least once a year, all the professionals involved should be in a meeting together and your financial planner should be able to quarterback the rest of the process in between.

Step 4: Educate and Involve Family Members

It’s crucial for family members involved in the estate to understand the plan. We call this managing the generational ladder – both up and down. This means ensuring all primary beneficiaries are informed and prepared.

Action: Hold a family meeting with the advisory team to ensure everyone understands the estate plan and their roles.

Taking Charge with Confidence

By upgrading your parents’ advisory team and implementing strategic estate planning measures, you can ensure their financial security and legacy are protected. This proactive approach addresses their fears of outliving their money and optimizes their estate for the benefit of heirs because there is only one person, we don’t want to leave money to, that’s Uncle Sam!

Imagine your elderly parents enjoying their golden years without the stress of financial uncertainty. By choosing FSC Wealth Advisors, you're not just hiring a service; you're gaining a team dedicated to transforming their financial outlook and preserving their wealth for generations to come.

 Don’t let advisors operating in a silo jeopardize your family’s financial future. Take the first step towards comprehensive, reliable financial planning today. Contact us for a free consultation and discover how we can help your family achieve financial peace of mind. Click here to schedule a 20-minute call and secure your parents’ financial legacy because they deserve the best.