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Helping Elders Manage Their Assets

Helping Elders Manage Their Assets

July 17, 2023

Today, many individuals are finding it necessary to help elderly parents or relatives manage their personal finances. One area of particular concern is property management. This issue may arise when seniors reach their late seventies or older, and plans that may have proven satisfactory at age 65 may require a second look. If you have an aging parent or relative, the following arrangements can assist you in addressing this concern:

Durable Power of Attorney—This mechanism allows elderly individuals to appoint a trusted relative or friend as a representative in legal and financial matters. The powers granted may be limited or broad in scope, and may vary from state to state. They remain in effect during disability or incompetence—although, in the event of incompetence, a guardian or conservator could revoke them. Some financial institutions are reluctant to recognize a durable power of attorney, so it is worthwhile to explore any potential problems beforehand.

Revocable and Irrevocable Trusts—A revocable trust allows an aging senior to retain control of his or her property, while delegating the responsibility for daily management to others. This arrangement gives the senior the flexibility to change the trust in any way, and at any time, as needs and circumstances dictate. As added protection, a revocable trust may remain unfunded as long as a senior is legally competent. On the other hand, seniors willing to relinquish ownership of assets altogether may wish to consider establishing an irrevocable trust.

  • Private Annuities. With a private annuity, an elderly individual can formally transfer property to a family member in exchange for that person’s promise to make periodic payments for the rest of the senior’s life.
  • Informal Arrangements. A senior can also informally transfer property to his or her heirs, in many cases free of gift taxes, in exchange for being taken care of for the rest of his or her life. This arrangement, however, should be approached with caution. Even with the best of intentions, it is possible that adult children could deplete assets through poor management, divorce, or creditor claims. Once the assets are gone, an aging parent or relative could become dependent on the goodwill and financial circumstances of family members.

Review Plans Periodically

It may be necessary to periodically review these arrangements, as needs and circumstances change. You may also wish to consider consulting a financial professional with experience in concerns facing today’s seniors. Since arranging a loved one’s affairs may be a once-in-a-lifetime situation, professional assistance may prove invaluable.



Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

Fixed and Variable annuities are suitable for long-term investing, such as retirement investing.  Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply.  Variable annuities are subject to market risk and may lose value.


This article was prepared by Liberty Publishing, Inc.



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