IRA Blunders in Elder Care Planning
Elder Parent Planning
Normally, your parents' generation does not like to talk about their finances. There are, however, a few things that can and should be discussed with your parents and/or other elderly loved ones.
One of the most valuable things you can do is work with them to fill out a document locator, which should include the location of wills, trusts, bank account statements, and other account or policy information. Please note that it isn't vital at this stage to necessarily know the value of assets, as much as it is important to be able to track down the information once needed. This simple measure can take so much of the pressure off during times of stress resulting from illness or death. Click on our document locator to print a copy today.
Get details about what, if any, legal paperwork has been prepared. Do they have a power of attorney for property (assets), a power of attorney for health care, and/or a living will? If these legal documents haven't been executed, consider meeting with an estate planning attorney on these issues and more.
Take time to review that all beneficiary designations are up-to-date and in keeping with the owner's wishes. Be sure to look at life insurance, pension, IRA, annuity assets, and certificates of deposit to name a few.
Long term care should also be investigated with retired elderly parents as a means to slow the possible erosion of their assets. This is especially important if there is a big age difference between a husband and wife. Unfortunately, long term care is not always a viable option if there are major health issues.
You may want to consider meeting with an attorney who specializes in elder care planning, which can prove to be a very integral part of insuring that major issues and financial concerns are addressed. Taking the time to do this with your parents will also help to lessen or avoid pit falls upon death. Click here for an article about a "pickle" of a situation you don't want to find yourself in.
Death of a Family Member
When a loved one dies it is not uncommon that financial mistakes are made. The main reason for this is that major decisions are made when survivors aren't thinking clearly. One of the most crucial and far-reaching mistakes that is made results from the rolling over of IRA assets held in the deceased's name - namely, IRAs, 401(k) accounts, 403(b) accounts - to the named beneficiary.
It may seem otherwise, but these decisions do not need to be made immediately. Consult with a retirement or tax specialist who can help insure mistakes are not made. "Retirement accounts are like egg shells, once you crack them the game is over." The beneficiary may be heavily taxed if transfers are done incorrectly or flexibility is limited. We suggest reading up on this topic especially if you are a beneficiary of elderly parents, aunts, uncles, a brother, or sister, it is important to be knowledgeable in this area for the future. www.irahelp.com *
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