Determine where you are now
Start off by putting together a personal balance sheet of assets and liabilities. Identify assets, retirement plans, life insurance, and long-term care policies, as well as nonfinancial assets currently held. Then identify liabilities, such as home mortgages, auto loans, and any other debts. This is an important task as it may uncover “forgotten” assets, such as dormant investment and retirement accounts, that are now subject to new unclaimed property rules in Pennsylvania.
Identify what you want to achieve
Define and identify the priority issues that require immediate attention and focus. Include both short-term and long-term financial goals and the potential needs of the elderly person. Also, be sure to ask questions about the future now, while the elderly person has his or her faculties, so their wishes are known.
Identify a team and determine who is accountable
Assemble a trusted team. Too often elderly people fall victim to all sorts of scams, including Medicare fraud, telemarketing scams, and even fraud involving home loans. Identify who is responsible for, and accountable for, implementing various pieces of your plan of protection. The team should include at least one responsible family member who is younger and who will look out for the elderly person’s best interests. A CPA and an attorney who specializes in estate or elder law should be part of the team. If the person has investment assets, the financial adviser should be part of the team. Yes, there is a cost to using the services of professionals, but the advice and potential dollars saved in taxes and other costs can far exceed the fees incurred.
Review and make changes
Once a plan is in place, it’s not over. There is no autopilot. Your elder’s plan must be revisited periodically—at a minimum each year, perhaps more often whenever a significant or unforeseen life event takes place.
Your CPA can help
There is no asset preservation plan that fits all, which is why it can be difficult to know where to begin to ensure your assets are protected. Fortunately, a CPA can help you determine the necessary steps. Find a CPA near you, or visit www.picpa.org/moneyandlife for more tips.
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