Helping Parents: CFP or Elder Law Attorney

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PlayingLife
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Helping Parents: CFP or Elder Law Attorney

Post by PlayingLife » Mon Jul 24, 2017 1:39 pm

Hi everyone,

Should I hire a CFP first or Elder LA? What can I expect from the LA?

1. Parents have a wide collection of assets and revenue streams that needs to be formerly reviewed and likely consolidated and/or optimized: two annuities, individual stock, a paid off house, a couple of savings accounts, etc

2. My father is not doing well and may need professional care soon - for now he is home but cannot drive. His intellect is in fact, I do not have POA yet. His pension will be gone once he passes and if my mom is still around (highly likely scenario as she is healthy today) she may run into financial trouble unless she never needs long term care. They do have some various insurance right now.

3. They are smart in terms of avoiding all debt but otherwise are not very financially savy. I want my mom to better understand her position so she can become accustomed to a smart budget. For my father's safety they need to get out of the house too, but she will not let these conversations move forward for now. On top of everything, their septic is now being replaced and i need to help them choose how to handle the payment.


4. I want to ensure their finances are protected as much as possible given life events that could come down the road.

Thank you for your guidance in answering my questions. I really look forward to speaking to these professionals as we are not making progress alone.

PL

Carefreeap
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Re: Helping Parents: CFP or Elder Law Attorney

Post by Carefreeap » Mon Jul 24, 2017 1:44 pm

How old are your parents?

What do you estimate is their income and net worth? You should break this out by asset type e.g. house = x, and so on.

What general metro area are they in and have you estimated of the cost of assisted living and nursing homes?

Do they have wills and durable POA?

Beth*
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Re: Helping Parents: CFP or Elder Law Attorney

Post by Beth* » Mon Jul 24, 2017 2:07 pm

Are you sure your mother won't receive survivor benefits from your father's pension? Most pensions are subject to ERISA and ERISA, which has been in effect since the mid-1980s, requires that a spouse waive any claim to retirement survivor benefits in writing if the spouse does not want to receive them. If your mother did not do this, and if your father retired in 1985 or later, she is probably eligible to receive at least 50 percent of your father's pension if he dies first.

PlayingLife
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Re: Helping Parents: CFP or Elder Law Attorney

Post by PlayingLife » Mon Jul 24, 2017 2:09 pm

Hi Carefree,

Sorry, I'm not sure why this info is necessary as I am not using this thread to investigate solutions? This post is to figure out who to contact first, and what things an elder law attorney can help with - correct me if I am wrong please and thank you for looking. I have all their assets broken down, my father is 73 and my mother in late 60s.

Key things I want a CFP and ELA for are:
A) need a professional to confirm I am right about the annuity guidelines
B) someone to say the decisions I make about consolidating and investing things is not catastrophic (will run everything by this forum too)
C) someone to advise us on how to protect my parents' assets and what to anticipate in the years ahead

Avo
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Re: Helping Parents: CFP or Elder Law Attorney

Post by Avo » Mon Jul 24, 2017 2:11 pm

Elder Law Attorney first. Then, advice from here may be enough. If not, a fee-only, fiduciary CFP.

delamer
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Re: Helping Parents: CFP or Elder Law Attorney

Post by delamer » Mon Jul 24, 2017 2:25 pm

Are you concerned about Medicaid planning or just generally about wills, probate, etc.?

Carefreeap
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Re: Helping Parents: CFP or Elder Law Attorney

Post by Carefreeap » Mon Jul 24, 2017 4:30 pm

delamer wrote:Are you concerned about Medicaid planning or just generally about wills, probate, etc.?


Bingo.

The ages, life expectancy, types and values of resources will all give some direction as to which professional to choose.

As an example, my MIL who has an excellent federal pension, substantial assets and LTC insurance only needed an estate attorney.

My father who only has SS and a $100/mth pension and no assets needed the advice of an Elder Law specialist to maintain his benefits for poverty level Medicaid assistance.

NotWhoYouThink
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Re: Helping Parents: CFP or Elder Law Attorney

Post by NotWhoYouThink » Mon Jul 24, 2017 5:33 pm

Are you hoping the professional you consult will persuade your parents to take some action that they won't take just at your suggestion? It sounds like your father may no longer be able to understand some of these issues, and your mother may be resistant to any change. In that case, you are certainly free to go get advice, but I'm not sure how actionable it will be.

If you are looking at POA and medical POA and getting authority to direct their financial affairs, that might be a trust and estates attorney. The elder law attorney can help you if your issue is protecting their assets from nursing home payments so that Medicaid will kick in. It might take a different specialist to help your with decisions about their annuities. If you have the exact name of their annuities and know who owns them (you mom?dad?both?) someone here might be able to refer you to an expert who could review them.

littlebird
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Re: Helping Parents: CFP or Elder Law Attorney

Post by littlebird » Mon Jul 24, 2017 6:54 pm

Carefreeap wrote:
My father who only has SS and a $100/mth pension and no assets needed the advice of an Elder Law specialist to maintain his benefits for poverty level Medicaid assistance.


I admit to being curious as to what advice an Elder Law specialist gives to a person who only has SS and a $100/month pension and no assets.

Carefreeap
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Re: Helping Parents: CFP or Elder Law Attorney

Post by Carefreeap » Mon Jul 24, 2017 7:10 pm

littlebird wrote:
Carefreeap wrote:
My father who only has SS and a $100/mth pension and no assets needed the advice of an Elder Law specialist to maintain his benefits for poverty level Medicaid assistance.


I admit to being curious as to what advice an Elder Law specialist gives to a person who only has SS and a $100/month pension and no assets.


He was located by a former employer and notified that he was entitled to a pension (of $100/mth) as well as 15 years of payments for a total amount of approximately $17k. We didn't want him disqualified from Medicaid at age 80 and weren't sure if he should take the money. Fortunately CA has a policy about one time windfalls so we were able to work around the problem. I would have had no idea of how to handle if I hadn't consulted a specialist. I think it cost $300.

PlayingLife
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Re: Helping Parents: CFP or Elder Law Attorney

Post by PlayingLife » Tue Jul 25, 2017 7:46 am

Okay I see a lot of questions asking me to alleviate further to the exact situation, to determine in what order to hire a CFP and Elder Law Attorney. Thank you for your responses thus far, here are the remaining details:

*Parents: Age 73 and 67. Mom's health is fine and Dad suffers from Aphasia, his balance and speech are almost gone (link below explains more detail). Intellect is fine but conversations are very difficult. My parents avoid debt and have made it through life just fine, but now I am worried how long their assets will last

*It's my understanding that my parents opted to receive a larger pension until my father passes, instead of covering both my parents for life. If my dad outlives my mom there is nothing for us to worry about, otherwise there is a potential massive risk (likely scenario in my eyes).

*Their assets: Paid off house (~$275K), two annuities w/combined death benefit of about $220K (see link to full description below), a couple of individual stocks such as Exxon and Verizon worth around 125K, a couple of different savings accounts, my father's truck that needs to be sold (~$20K)

*Additional protection: They do have some life insurance on my dad until 80 ($200K payout), they also have LTC insurance until 80 ($4400 a month up to 3 years)

*Living situation: Their $275K house is only this low in value due to them being out in the woods. Anything closer to us (40 min) is a definitely HCOL. They are having trouble taking care of their bi-levelhouse now, although the house is in great shape. It's also a safety hazard for my father to go up and down stairs since he falls a lot now. It would be very hard for them to find a move in ready ranch, and there are few single floor condos available. This housing situation is a whole topic on it's own, not to be addressed in detail in this thread.

Some questions for either the CFP and/or Elder Law Attorney (many of these I will check first with BH's):
1. Are we correct about the pension situation, can you help us double check?
2. What do we do with all the existing assets? How can we consolidate savings, and how to we manage incoming funds from SS & Pension?
3. How can we best protect this money should my dad need LTC?
4. Is our current Life Insurance and LTC Insurance optimized given their age?
5. Can you advise us on setting up POA?
6. How do we ensure my mom is protected as long as possible?
7. Can you verify I am correct in understanding the annuities?
8. They need to make a ~$25K payment for a new septic, and they have one additional payment of $10 - 20K coming up. Where do we draw this money from and do we consider low interest loans?
9. How should we approach the housing situation financially?

Annuity Info:
https://www.bogleheads.org/forum/viewtopic.php?f=2&t=183246

PlayingLife
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Re: Helping Parents: CFP or Elder Law Attorney

Post by PlayingLife » Tue Jul 25, 2017 7:49 am

One last thing - they do have wills I just need to get the details, and I do not think POA for myself or my sibling has been arranged, will also discuss this.

delamer
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Re: Helping Parents: CFP or Elder Law Attorney

Post by delamer » Tue Jul 25, 2017 10:31 am

Your mother should contact the administrator of your father's pension plan to find out if she will receive a survivor benefit. Whether it is a government pension, corporate pension, or union pension, your parents should have paperwork showing how to contact the administrator.

Your father is not going to be able to get additional life insurance given his condition. If he is in much worse health than your mother, there would be no point in obtaining life insurance on her.

Regarding your #2, what kind of advice do you need about consolidating savings and spending their current income? Are you talking about protecting assets for your mother's benefit, or just managing the money on a day-to-day basis?

The POA and possible Medicaid planning are legal issues. The rest of the topics you raised are financial. If you provide more details about their current income, you'd get good advice here on how to handle the financial aspects.

PlayingLife
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Re: Helping Parents: CFP or Elder Law Attorney

Post by PlayingLife » Tue Jul 25, 2017 10:44 am

delamer wrote:Your mother should contact the administrator of your father's pension plan to find out if she will receive a survivor benefit. Whether it is a government pension, corporate pension, or union pension, your parents should have paperwork showing how to contact the administrator.

Your father is not going to be able to get additional life insurance given his condition. If he is in much worse health than your mother, there would be no point in obtaining life insurance on her.

Regarding your #2, what kind of advice do you need about consolidating savings and spending their current income? Are you talking about protecting assets for your mother's benefit, or just managing the money on a day-to-day basis?

The POA and possible Medicaid planning are legal issues. The rest of the topics you raised are financial. If you provide more details about their current income, you'd get good advice here on how to handle the financial aspects.


Thank you for the response! I have no doubt I will get good advice from this forum, as I always have. Still, since my actions impact my parents and not myself, so I would be most comfortable in paying someone just to take a double look at what decisions I make. For myself, I do manage all my family's finances and investments without the help of a CFP (BH's only). I do appreciate suggestions from this forum.

My father's pension is $4200 a month. He SS is $1489 a month and my mother's is at $720 (take home - after medicare deductions). I know my mom's SS was done right with the help of this forum, but I forget how it works...I think she filed under my father and will file under herself at 69.

Regarding the consolidation of savings & their current income: One of the annuities has an IRA built into it, and my father has mandatory annual withdrawals. This withdrawal money and the SS money goes into a basic savings account with no return. Additionally, they have the individual stocks I mentioned...I am wondering what to do with these various funds, knowing that they should exit individual stocks. Build their emergency fund and put the rest in bonds? No idea as I haven't yet researched how to invest, given their age and situation.

delamer
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Re: Helping Parents: CFP or Elder Law Attorney

Post by delamer » Tue Jul 25, 2017 10:53 am

PlayingLife wrote:
delamer wrote:Your mother should contact the administrator of your father's pension plan to find out if she will receive a survivor benefit. Whether it is a government pension, corporate pension, or union pension, your parents should have paperwork showing how to contact the administrator.

Your father is not going to be able to get additional life insurance given his condition. If he is in much worse health than your mother, there would be no point in obtaining life insurance on her.

Regarding your #2, what kind of advice do you need about consolidating savings and spending their current income? Are you talking about protecting assets for your mother's benefit, or just managing the money on a day-to-day basis?

The POA and possible Medicaid planning are legal issues. The rest of the topics you raised are financial. If you provide more details about their current income, you'd get good advice here on how to handle the financial aspects.


Thank you for the response! I have no doubt I will get good advice from this forum, as I always have. Still, since my actions impact my parents and not myself, so I would be most comfortable in paying someone just to take a double look at what decisions I make. For myself, I do manage all my family's finances and investments without the help of a CFP (BH's only). I do appreciate suggestions from this forum.

My father's pension is $4200 a month. He SS is $1489 a month and my mother's is at $720 (take home - after medicare deductions). I know my mom's SS was done right with the help of this forum, but I forget how it works...I think she filed under my father and will file under herself at 69.

Regarding the consolidation of savings & their current income: One of the annuities has an IRA built into it, and my father has mandatory annual withdrawals. This withdrawal money and the SS money goes into a basic savings account with no return. Additionally, they have the individual stocks I mentioned...I am wondering what to do with these various funds, knowing that they should exit individual stocks. Build their emergency fund and put the rest in bonds? No idea as I haven't yet researched how to invest, given their age and situation.


Your first priority should be find find out 1) whether there is a survivor benefit for the pension and, if so, how much, and 2) how much your mother's SS benefit will be when she files under her own record. There is a disaster in the making if she gets no survivor benefit from the pension and her own SS is less than what she is entitled to as your father's survivor. Her income could drop to as little as $1489/month if your father predeceases her in that scenario.

PlayingLife
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Re: Helping Parents: CFP or Elder Law Attorney

Post by PlayingLife » Sat Aug 12, 2017 5:30 pm

delamer wrote:
Tue Jul 25, 2017 10:53 am
PlayingLife wrote:
delamer wrote:Your mother should contact the administrator of your father's pension plan to find out if she will receive a survivor benefit. Whether it is a government pension, corporate pension, or union pension, your parents should have paperwork showing how to contact the administrator.

Your father is not going to be able to get additional life insurance given his condition. If he is in much worse health than your mother, there would be no point in obtaining life insurance on her.

Regarding your #2, what kind of advice do you need about consolidating savings and spending their current income? Are you talking about protecting assets for your mother's benefit, or just managing the money on a day-to-day basis?

The POA and possible Medicaid planning are legal issues. The rest of the topics you raised are financial. If you provide more details about their current income, you'd get good advice here on how to handle the financial aspects.
Thank you for the response! I have no doubt I will get good advice from this forum, as I always have. Still, since my actions impact my parents and not myself, so I would be most comfortable in paying someone just to take a double look at what decisions I make. For myself, I do manage all my family's finances and investments without the help of a CFP (BH's only). I do appreciate suggestions from this forum.

My father's pension is $4200 a month. He SS is $1489 a month and my mother's is at $720 (take home - after medicare deductions). I know my mom's SS was done right with the help of this forum, but I forget how it works...I think she filed under my father and will file under herself at 69.

Regarding the consolidation of savings & their current income: One of the annuities has an IRA built into it, and my father has mandatory annual withdrawals. This withdrawal money and the SS money goes into a basic savings account with no return. Additionally, they have the individual stocks I mentioned...I am wondering what to do with these various funds, knowing that they should exit individual stocks. Build their emergency fund and put the rest in bonds? No idea as I haven't yet researched how to invest, given their age and situation.
Your first priority should be find find out 1) whether there is a survivor benefit for the pension and, if so, how much, and 2) how much your mother's SS benefit will be when she files under her own record. There is a disaster in the making if she gets no survivor benefit from the pension and her own SS is less than what she is entitled to as your father's survivor. Her income could drop to as little as $1489/month if your father predeceases her in that scenario.

Well it's been confirmed - they did choose to take higher pension throughout my father's life, and it will cease to exist once he goes. They are clear where they went wrong, and that discussion is past us. My mother's SS will go to $1462/month at this point, and that will be her total monthly income. As stated above, and as I have feared, this is a complete disaster in the making. I am going to schedule an appointment with an elder law attorney this week. I will likely create a new thread to talk about matters - I have an updated list of their assets and really could use some solid advice. I'll put the post up later on.

delamer
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Re: Helping Parents: CFP or Elder Law Attorney

Post by delamer » Sat Aug 12, 2017 9:56 pm

PlayingLife wrote:
Sat Aug 12, 2017 5:30 pm
delamer wrote:
Tue Jul 25, 2017 10:53 am
PlayingLife wrote:
delamer wrote:Your mother should contact the administrator of your father's pension plan to find out if she will receive a survivor benefit. Whether it is a government pension, corporate pension, or union pension, your parents should have paperwork showing how to contact the administrator.

Your father is not going to be able to get additional life insurance given his condition. If he is in much worse health than your mother, there would be no point in obtaining life insurance on her.

Regarding your #2, what kind of advice do you need about consolidating savings and spending their current income? Are you talking about protecting assets for your mother's benefit, or just managing the money on a day-to-day basis?

The POA and possible Medicaid planning are legal issues. The rest of the topics you raised are financial. If you provide more details about their current income, you'd get good advice here on how to handle the financial aspects.
Thank you for the response! I have no doubt I will get good advice from this forum, as I always have. Still, since my actions impact my parents and not myself, so I would be most comfortable in paying someone just to take a double look at what decisions I make. For myself, I do manage all my family's finances and investments without the help of a CFP (BH's only). I do appreciate suggestions from this forum.

My father's pension is $4200 a month. He SS is $1489 a month and my mother's is at $720 (take home - after medicare deductions). I know my mom's SS was done right with the help of this forum, but I forget how it works...I think she filed under my father and will file under herself at 69.

Regarding the consolidation of savings & their current income: One of the annuities has an IRA built into it, and my father has mandatory annual withdrawals. This withdrawal money and the SS money goes into a basic savings account with no return. Additionally, they have the individual stocks I mentioned...I am wondering what to do with these various funds, knowing that they should exit individual stocks. Build their emergency fund and put the rest in bonds? No idea as I haven't yet researched how to invest, given their age and situation.
Your first priority should be find find out 1) whether there is a survivor benefit for the pension and, if so, how much, and 2) how much your mother's SS benefit will be when she files under her own record. There is a disaster in the making if she gets no survivor benefit from the pension and her own SS is less than what she is entitled to as your father's survivor. Her income could drop to as little as $1489/month if your father predeceases her in that scenario.

Well it's been confirmed - they did choose to take higher pension throughout my father's life, and it will cease to exist once he goes. They are clear where they went wrong, and that discussion is past us. My mother's SS will go to $1462/month at this point, and that will be her total monthly income. As stated above, and as I have feared, this is a complete disaster in the making. I am going to schedule an appointment with an elder law attorney this week. I will likely create a new thread to talk about matters - I have an updated list of their assets and really could use some solid advice. I'll put the post up later on.
I'm sorry to hear about the pension. That will be a big income loss for your mother if she survives your father.

If she receives the life insurance payout, she'll have around $550K in liquid assets based on what you posted above. She can take about $22K to $25K per year safely from that if she has 30% (or more) in equities. So she'd have annual income in the low $40s. Lots of people live on less, but that will be quite a cut in her income.

Good luck with the attorney.

Dottie57
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Re: Helping Parents: CFP or Elder Law Attorney

Post by Dottie57 » Sat Aug 12, 2017 10:31 pm

An elder law attorney should be able to tell you if an annuity for your mom might work well. I don't know the impact of medicare on an SPIA or vice versa, but think you should find out.

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celia
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Re: Helping Parents: CFP or Elder Law Attorney

Post by celia » Sun Aug 13, 2017 3:01 am

PlayingLife wrote: *Their assets: Paid off house (~$275K), two annuities w/combined death benefit of about $220K (see link to full description below), a couple of individual stocks such as Exxon and Verizon worth around 125K, a couple of different savings accounts, my father's truck that needs to be sold (~$20K)

*Additional protection: They do have some life insurance on my dad until 80 ($200K payout), they also have LTC insurance until 80 ($4400 a month up to 3 years)
On paper, they look pretty good. They have over $500K in assets with another $200K coming after your dad dies. I think your mom should sell the house and rent a place close to where your dad will be staying, so she can see him every day, if she wishes.
*Living situation: Their $275K house is only this low in value due to them being out in the woods. Anything closer to us (40 min) is a definitely HCOL. They are having trouble taking care of their bi-levelhouse now, although the house is in great shape. It's also a safety hazard for my father to go up and down stairs since he falls a lot now.
Has a doctor advised your dad to move to assisted living or a nursing home so that he can get the care he needs? If so, notify the LTC insurance company that he needs to be placed. Placement should be done with the doctor, nursing/assisting living facility, insurance companies, and family working together. If you just pick a place and put him there, then expect insurance to cover it retroactively, you will be disappointed. The place you pick might not have the correct services the doctor says your dad needs or the state license or licensing of the staff might not qualify for insurance needs. So be warned that everyone should work together BEFORE he is placed.

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