Elder care attorney versus financial planner
October 29, 2015 12:14 PM Subscribe
My mom has Parkinson's Disease, is 66, and is recovering from a broken hip. My sister and I are looking at assisted living facilities for when she gets out of rehab and are investing her money with either an elder care attorney or a financial planner.
She has a sizable retirement fund, as well as a house to sell, and a pension. Since going into assisted living starting at age 66 is not the norm, and will be much more expensive than living at home we would like to smart about her money to ensure it lasts her for years to come. That will involve evaluating how it is invested and possibly moving to different types of investments based on this situation. She has a will and living will already.
We will be setting up power of attorney next week with an elder care attorney, who is also going to propose some sort of plan to re-invest the money after that meeting. The initial consultation is about $2000. To me it seems like our need for an attorney does not extend beyond setting up power of attorney at this point, and what we need is actually a financial planner. My partner's brother in law is a financial planner and has offered his services but my sister wants to use just the attorney or possibly the attorney in combination with also calling a "big" financial company like Fidelity.
My sister "doesn't trust" the financial planner (who she hasn't met as he lives out of state) and thinks the lawyer is necessary.
I think no one will look out for us as well as a family member so I prefer him to just calling up Fidelity, and I think beyond setting up power of attorney we don't need the attorney. I also think the lawyer is over priced as power of attorney should be a few hundred max (consider they have to come to her at rehab facility).
What service can an elder care attorney offer us? What should we consider here?
She has a sizable retirement fund, as well as a house to sell, and a pension. Since going into assisted living starting at age 66 is not the norm, and will be much more expensive than living at home we would like to smart about her money to ensure it lasts her for years to come. That will involve evaluating how it is invested and possibly moving to different types of investments based on this situation. She has a will and living will already.
We will be setting up power of attorney next week with an elder care attorney, who is also going to propose some sort of plan to re-invest the money after that meeting. The initial consultation is about $2000. To me it seems like our need for an attorney does not extend beyond setting up power of attorney at this point, and what we need is actually a financial planner. My partner's brother in law is a financial planner and has offered his services but my sister wants to use just the attorney or possibly the attorney in combination with also calling a "big" financial company like Fidelity.
My sister "doesn't trust" the financial planner (who she hasn't met as he lives out of state) and thinks the lawyer is necessary.
I think no one will look out for us as well as a family member so I prefer him to just calling up Fidelity, and I think beyond setting up power of attorney we don't need the attorney. I also think the lawyer is over priced as power of attorney should be a few hundred max (consider they have to come to her at rehab facility).
What service can an elder care attorney offer us? What should we consider here?
Best answer: I would never take financial advice from a family member. If things go wrong, what's your recourse? Are you going to sue your partner's brother-in-law if he gives you crappy advice?
I wouldn't necessarily take investment advice from an attorney either, but I would start with the attorney to understand the legal/tax issues around the power of attorney and investing your mom's money. $2K is a lot and you may want to shop around, but getting your mom's affairs well set up is invaluable. We have spent 3 years and countless $1000s on sorting out my mother-in-law's affairs and it would all have been avoided with some good advice and planning from the start. An elder care attorney has seen this situation over and over again, and will have great practical advice for you. Your partner's brother-in-law, on the other hand, is likely not specialized in this kind of situation and may miss important issues.
IMO you should definitely do the initial consultation with the lawyer, and then find a reputable independent unrelated financial planner, who charges a flat fee rather than a % of assets, to help you structure your mom's investments.
posted by yogalemon at 12:48 PM on October 29, 2015 [2 favorites]
I wouldn't necessarily take investment advice from an attorney either, but I would start with the attorney to understand the legal/tax issues around the power of attorney and investing your mom's money. $2K is a lot and you may want to shop around, but getting your mom's affairs well set up is invaluable. We have spent 3 years and countless $1000s on sorting out my mother-in-law's affairs and it would all have been avoided with some good advice and planning from the start. An elder care attorney has seen this situation over and over again, and will have great practical advice for you. Your partner's brother-in-law, on the other hand, is likely not specialized in this kind of situation and may miss important issues.
IMO you should definitely do the initial consultation with the lawyer, and then find a reputable independent unrelated financial planner, who charges a flat fee rather than a % of assets, to help you structure your mom's investments.
posted by yogalemon at 12:48 PM on October 29, 2015 [2 favorites]
Best answer: How much is the financial planner going to cost? What kind of financial planner is he (i.e. is he flat fee or does he get paid based on a percentage of your mom's investments, does he encourage clients to buy investments that require a substantial front-end load, etc.)? Not all financial planners are created equal. Honestly, there are a lot of terrible financial planners out there. I don't think most of them have bad intentions, but the reward and compensation system can be very skewed, and it can skew a financial planner's thinking, and a lot of them really just do the same thing for everyone and the main value they add is in reassuring you that you're not doing something stupid.
Basically, I would not count the "family member" angle for much - he may have good intentions, and he may even have lots of happy clients, but that doesn't mean he's right for you and your mom in this instance.
Also the type of financial advising you need is going to depend on how much money your mother has and what her/your goals for it are. You don't need to answer these questions here, but you should probably think about them and discuss them if you haven't already. Are you hoping to preserve the capital while she lives primarily on the income and pension or will you be drawing it down over the course of her life? Is a "sizable" retirement fund hundreds of thousands of dollars or millions? "A house to sell" is equally vague.
Basically, I think you should probably shop around more for both a lawyer and a financial planner. These two people are not the only options.
posted by mskyle at 1:11 PM on October 29, 2015 [1 favorite]
Basically, I would not count the "family member" angle for much - he may have good intentions, and he may even have lots of happy clients, but that doesn't mean he's right for you and your mom in this instance.
Also the type of financial advising you need is going to depend on how much money your mother has and what her/your goals for it are. You don't need to answer these questions here, but you should probably think about them and discuss them if you haven't already. Are you hoping to preserve the capital while she lives primarily on the income and pension or will you be drawing it down over the course of her life? Is a "sizable" retirement fund hundreds of thousands of dollars or millions? "A house to sell" is equally vague.
Basically, I think you should probably shop around more for both a lawyer and a financial planner. These two people are not the only options.
posted by mskyle at 1:11 PM on October 29, 2015 [1 favorite]
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So, I think you need a financial planner. I can understand your sister's reluctance to use a financial planner that she doesn't know. Lots of shady people end up taking advantage of friends/extended family/ fellow church members etc. My suggestion is to show respect for her caution (I assume she is a co-trustee for your mother) So, set up a meeting between her and the brother-in-law so she can evaluate him just like anyone else. Let her ask her questions and see how it goes. If she still resists, you need to work out a compromise. There will be many, many more decisions that you two will be making for your mother in the years to come - now is the time to work together as you mean to go on. Going with a big firm has its own advantages (in fact, not knowing your BIL myself, it might be my choice as well) So, if she still insists that is best, this is not the fight to ruin your relationship with your sister over.
posted by metahawk at 12:48 PM on October 29, 2015 [2 favorites]