Who’s Looking After Your Parent’s Money?

Like everyone else, physicians have aging parents with personal and financial needs. But who will take the reins when your parents are no longer able to do so? What if the stress of managing your parents and their finances becomes a burden to you, or worse, causes fall outs within the family unit. Aesthetic MD Insider talked to Herb Cohen, a licensed professional financial fiduciary in Lake Forest, CA. Herb has worked with many physicians in this regard.

Trust

My father-in-law was well into his 90’s when he was hospitalized and began a quick descent, health wise. His situation was further complicated by living some 3,000 miles from my wife and me, the only people willing and able to help with medical decision-making, residence choices, and management of financial affairs. This was a difficult learning experience and one that made me think about who would be there to help if family is not available, or family dynamics rule out one or more relatives. The answer turned out to be licensed private professional fiduciaries who, by court appointment, serve as guardians, conservators and personal representatives of estates. They also serve by agreement as trustees, representative payees, or as agents under powers of attorney. Additional information is available on the Professional Fiduciary Association of California website [www.pfac-pro.org]. Outside of California go to www.guardianship.org.

After this situation with my family I decided to use my prior legal and financial experience to become a private professional fiduciary,. I serve my clients in one or more of the above capacities. A typical client is between 75-100 years of age with no children; or the children are otherwise engaged; or there is conflict, and possibly litigation, among family members; or the parent passes away without an estate plan. A professional fiduciary can help ease the pain among family members by acting as an unbiased liaison and expert decision maker during this difficult time.

A memorable case is where an MD client with a family and busy practice came to know that his adult sibling was stealing from their elderly mother’s trust and brought suit against the sibling. The forensic accounting that I produced documented the theft with the information used to remove the sibling as trustee and bring charges against him. None of us want to think that this type of thing happens in families but, unfortunately, it does.

Most physicians, or parents of physicians, probably have planned their future by preparing an estate plan in consultation with legal and financial advisers. They may even have periodically amended the Plan to reflect changing circumstances. But the weak link often is implementation at a stage in life when one is least able to take care of financial choices. Often times, when this situation is finally realized by other family members it can be a mess to sort out.

What to do? The chart below will identify the primary alternatives of who or what is able to assist you and the up and down side to each.

Family Member or Good Friend to serve as power of attorney, successor trustee, or executor UP SIDE: high level of trust; little or no costDOWN SIDE: Nominee not capable of dealing with complexities nor available when the need arises; distrust within family
Financial Institution – Trust Banks or non-profit entity. UP SIDE: professionals; no concern for succession; large staffsDOWN SIDE: expensive; bureaucratic; inflexible. Focus is on managing finances not personal or health matters
Licensed Private Professional Fiduciary UP SIDE: licensed by a California State Agency with public disclosure; bondable; moderate expense; personal serviceDOWN SIDE: potential succession issues; geographical reach is limited

As physicians, you make medical determinations about the competency of your patients and address insurance matters, HIPPA rules, and the concerns of your patients’ families. A licensed fiduciary can do that too. You pay bills, including taxes, and spend time with investment advisors. As do I in my capacity as power of attorney, successor trustee, conservator and/or estate administrator. Just as physicians have a professional but intimate relationship with their patients, so do licensed private professional fiduciaries.

The relationship starts with one or more meetings and the fiduciary’s review of the documents which govern their responsibility and liability to the client and his/her family. The critical element is trust and confidence, as it is in a medical practice. The fiduciary has the legal and ethical responsibility to carry out his clients’ wishes, and the client has to have trust and confidence in the fiduciary to do so.

Keeping a family happy is important. Keeping an aged parent safe, secure and living within the means they planned for is imperative. To learn more, visit www.fiduciaryplus.com.