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Introduce Your Advisor to the Next Generation

Several years ago, Miriam’s daughter-in-law, Cindy, was concerned that she and her husband, Alex, would not have access to Miriam’s important personal documents, valuables and cash should she become incapacitated. When Cindy raised her concern to her mother-in-law, Miriam said, “I can give you a key to the safety deposit box.”

That was the moment when Cindy realized: for Miriam’s safety and wellbeing, they needed to make some changes. Cindy asked Alex who Miriam’s financial advisor was and where he or she worked. Alex’s response: “Actually, I have no idea.”

Safety Deposit Boxes Have Been Dying on the Vine

The New York Times found that each year, hundreds of people report valuable items—ranging from art to jewelry to family photos—as missing or stolen from their bank’s safe deposit boxes resulting in many banks are eliminating them. In fact, at least half of safe deposit boxes today in the U.S. are empty.

But older generations still believe safe deposit boxes are safe, and they often keep cash and jewelry there. However, FDIC insurance offers no protection inside a safety deposit box and many of America’s banks forbid keeping cash in them.

Miriam and her late husband, the “renters” as joint tenants with the usual rights of survivorship, originally owned the contents of the safety deposit box. The risk they took is a safety deposit box is not fireproof, waterproof, or even immune to theft.

And, as the Times revealed, box holders often learned this lesson the hard way and lost thousands of dollars all because they did not insure their missing items.

Meeting Mom’s Financial Advisor

The saying goes: “Successful wealth transfer planning does not usually happen in a vacuum.” Most firms, including Hefren-Tillotson, encourage meeting and serving the next generation.

With the advent of Zoom and GoToMeetings, it is even easier to connect a name to a face no matter where they live. Over a period of time, everyone gets to know each other and the conversations are more open and productive.

Having worked with Miriam and her husband before he died, their advisor had been both friend and confidant for more than 30 years. Miriam always said to contact Alex and Cindy if anything happened to her. Alex and Cindy, however, are not waiting for that day. So, before anything happens to her, Alex would be presented options and recommendations. The first might be to add Alex as a co-owner to her bank checking account. The second might be to appoint him as having power of attorney, which a local elder care attorney can easily draw up.

There are two types: a general power of attorney, which goes into effect when Miriam signs it, and remains in effect until and unless she is disabled. Alex will make decisions for her when she is disabled and it must be spelled out clearly that way.

A durable power of attorney goes into effect as soon as Miriam signs it, and stays in effect as long as she lives, unless she cancels it. Alex can then act in her behalf even if Miriam is capable. She retains control and Alex honors her wishes.

If there is no power of attorney, Alex could petition probate court in the jurisdiction where Miriam lives, and asks to be appointed conservator. This allows Alex to have the legal right to accept responsibility of Miriam’s finances and assets if she is partly or totally incapable of handling them.

Proof that Miriam is disabled comes from an evaluation administered by a guardian ad litem. The downside of obtaining a conservatorship is it’s time-consuming and expensive.

Lean on the Financial Professionals

Miriam’s Hefren-Tillotson financial advisor has already documented the necessary financial information that includes bank and investment accounts, insurance policies, Medicare, Social Security, Wills or Trusts.

Might there be more financials or valuables unaccounted for? Sure. There is likely cash and valuables in the safety deposit box if not hidden somewhere else in the house that her advisor might not be privy to.

Miriam’s Hefren-Tillotson advisor has also covered other vitally important areas:

If Miriam cannot communicate her own health care decisions, a living will allows Alex to state Mom’s wishes regarding medical treatments, life-prolonging and end-of-life procedures.

If Miriam has a health care proxy, she grants authority to another person to make medical decisions on her behalf when she is not able to communicate decisions on their own.

Does she have HIPAA authorization? A Health Insurance Portability and Accountability Act (HIPAA) authorization is a legal document that would allow Miriam’s health information to be used or disclosed to a third party, like Alex, the individual named as health care power of attorney.

It is vitally important that your kids, the next generation, are fully aware of your private, family financial information. It has been a safely guarded secret for many years. We do understand that. So, the challenge for you is simply being open and honest when discussing this topic with your kids because they really need to know.

If you, or someone you know share similar concerns contact us at Hefren-Tillotson today.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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