As your parents age, it is important to get them the assistance they need to maintain financial and personal security. Age-related cognitive decline makes managing finances and avoiding scams difficult, and failing to get your parents help can ultimately hurt your financial future if you stand to inherit from them. Setting up and getting help managing a trust for elderly parents is a great way to provide crucial financial assistance and protection.
At Marcia L. Campbell, CPA, we’ve helped countless seniors and their loved ones obtain peace of mind knowing their senior parents’ finances are in expert hands. Here’s what you need to know about how a trust can help.
What is a Trust for Elderly Parents?
A trust for elderly parents is a financial tool that can help you and your senior parents protect you both financially.
A trust is a legal document into which you can transfer funds, assets, or property. In doing so, the trust becomes the legal owner of the property. Essentially, a trust protects your parents from scams and financial mismanagement as they age or become ill. For you, it can help minimize or avoid expenses against your family’s assets and inheritance.
For example, imagine your parents have valuable property or significant savings.
If your parents have trouble staying on top of their finances and become more susceptible to scams, this poses a significant danger. Not only could they lose their life savings and valuable property, but this also directly and substantially reduces your inheritance.
Should they fall behind on bill payments, develop reckless spending habits, fall into debt, or owe a considerable sum in back taxes, all of this is paid for by the estate before you can receive your inheritance, directly hurting your financial future.
One benefit many don’t consider is the help of professional trustee services in these situations. Professional trustees are seasoned experts in the field with the financial knowledge and acumen to manage finances, help with budgeting, bill payments, and more. But they also enable you to get the most out of this flexible tool.
Imagine your parents want to travel the world in retirement. You can set up a trust so a professional trustee can help manage bill payments and other financial responsibilities, so they make the most of their travels without worrying about financial obligations.
“One of the biggest misconceptions of trusts I encounter in my profession is that they are only for estate planning. While that is one big benefit, trusts are incredibly versatile tools, and working with a professional trustee is the only way to maximize how much you can get out of it.”
– Marcia L. Campbell, CPA & Professional Fiduciary
Related Article: How Trusts for Elderly Parents Help Manage Their Finances
What Type of Trust Should I Get for My Parents?
When choosing which trust for elderly parents you should help set up, the choice typically depends on your needs. The two trusts people most often use are living trusts and irrevocable trusts. Let’s get into the different situations these are tailored to.
Related Article: Setting Up a Trust in California to Help Your Senior Parents
A Living Trust
A living trust for elderly parents is especially useful for assisting them in managing their finances and protecting them from scams.
A living trust is an invaluable tool that protects your parents’ assets, helps with estate planning, provides a means to help manage their finances, and allows you to avoid probate after they pass, which streamlines the process, minimizes costs, and the likelihood of litigation.
Related Article: How Do Trustee Services in California Help Seniors Manage Assets?
An Irrevocable Trust
An irrevocable trust is typically used for protecting assets from creditors, minimizing estate taxes, estate planning, and maintaining access to government benefits, which could be a valuable consideration if, for example, your parents receive disability assistance or want to qualify for Medicaid or nursing home care without having to dispose of their assets.
This kind of trust eliminates all ownership, thus relieving your parents of tax liability on the income generated by the assets within it.
Related Article: Trustee Services in California: Managing Finances for a Parent with Dementia
Need Help Managing Your Parents’ Finances? Schedule a Consultation for Help Managing a Trust for Elderly Parents!
A trust for elderly parents is an incredibly useful tool that can help prevent your parents from mismanaging their money, falling victim to scams, and making other mistakes that compromise their financial security and your financial future.
Give your parents the help they deserve and yourself the peace of mind. Schedule a consultation for premier professional trustee services to get started!
