Some of your older clients do not have family or they have no family they trust. Some know that their adult kids don’t get along and if both are on the estate documents, fights will be inevitable. You worry that as they age, some clients are going to need help with finances and their trust management and they shouldn’t count on family. When a client names one’s best friend to serve in the role of successor trustee may sound fine when they’re 50 years old but it’s not so fine when they’re 90.

The successor trustee of your client’s estate can do a lot of good or harm when he or she takes on that role. The person appointed to be the agent of a durable power of attorney is also in a position of tremendous power. Who should serve in that capacity? Should it be family or a professional outside the family?

Most often, your client appoints adult children or trusted people in their lives for this job. The danger arises when the adult child appears to be motivated to steal money or manipulate the elder into giving or loaning it to him. If it is a best friend, and both are aging, there is no assurance that the friend will survive long enough to help when needed or be competent to do so.

I once had a widowed client, living alone, no family in the U.S. who had appointed her best friend to be her successor trustee. I asked my 89-year-old client about the friend. “She lives right down the street”, my client told me. When I asked how old the friend was, she told me “88. She’s really sharp though, even though her vision is going”. I suggested she find a licensed fiduciary to take her friend’s place.

This could be your client. Time to step in and get the client to change that original, now unrealistic plan.

When you, the financial advisor see situations with clients in your book who are aging, and you know they will need someone trustworthy to help them with managing their estate and finances, you need to act. Here are some basics every advisor should know and do.

1. Get to know your client’s estate planning attorney, with written permission to communicate with her from your client. That is simple. Ask whether the estate plan is updated. Find out if the successor trustee is reliable, or in financial difficulty with potential motivation to steal. Team up and work together. If there is no estate planning attorney, give your clients some names of reliable lawyers you know and encourage making an appointment right away.

2. Ask your client about their appointed agents on both the family trust and any power of attorney document. Invite them to a meeting. Discuss the future for your client with the agent(s), particularly long-term care issues, budget and resources the successor might have to manage over your client’s lifespan.

3. Know reputable professional fiduciaries in your area and keep their contact information handy so you can refer your client to a list of them. Fiduciaries are not all created equal. Some are very helpful and can protect a vulnerable client from financial harm. Others are just not competent to do the job and shouldn’t be in it. Choose and vet your list carefully.

To understand more about best ways to manage aging clients and keep them financially safer, check out our book, Succeed With Senior Clients: A Financial Advisor’s Guide to Best Practices.  It’s a great start. And you can get up to 10 hours of CE credit for reading it! Get yours here.

 

Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com

Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too. Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients. They are the authors of "Succeed With Senior Clients: A Financial Advisors Guide To Best Practice," and "Hidden Truths About Retirement And Long Term Care," available at AgingInvestor.com offers accredited cutting edge on-line continuing education courses for financial professionals wanting to expand their expertise in best practices for their aging clients. To learn more about our courses click HERE
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