Michael Edlen: Senior Homeowners and Financial Issues

By Michael Edlen
Special to the Palisades News

In our efforts to help seniors remain in their current homes for as long as practical, there are often financial challenges that they or their families must resolve.

With many people living for far more years than they might have planned, financial situations become even more challenging. We recommend that families rely on the expertise of trained and qualified professionals for guidance.

This article’s intent is to explore ways to prepare in an organized way for consulting with financial planning professionals. Though written from the perspective of the senior, in many cases it will be the family that benefits from some of the suggestions.

Michael Edlen

Perhaps the simplest approach to analyzing the financial picture is to break it into three parts: 1.) identify your assets, 2.) figure out your monthly income, and 3.) be sure to account for all monthly expenses.

Be sure you know which government assistance programs are available to apply for that are not already sources of support for you. Having the perspective that this three-part review provides will better equip you to then consult a financial or other expert in working out a plan for continued financial security.

Identification of Assets: Checking accounts, savings accounts, money-market funds, certificates of deposits, bonds, stocks, partnership shares, IRAs, 401(k)s, pensions, items in safe deposit boxes, investment properties, your own home, vehicles, special collections and hidden valuables. Other assets may include money or other things of value that have been loaned out and not yet paid back or returned. It could be vitally important to identify any records of such financial activities and to take action where appropriate to collect.

Hidden valuables may be in those places you have put them for safe keeping. I have had clients bury cash in a can in the back yard, hidden coin collections in recesses behind cabinets, slipped bearer bonds behind picture frames, and secured valuable bot- tles of rare wine under the floor boards.

I know of many cases where cash was hidden in books which ended up in library resale boxes. People often hide valuables in back of drawers, in freezers, or pinned inside heavy coats.

Some of these assets could possibly provide for a much longer coverage of expenses later on. Since it is possible to not recall where those excellent hiding places are, it would be con- siderate and wise for family members to be aware of hidden valuables to assure that they will be found at the time the estate is settled.

Determination of Monthly Income:

Current employment, pension, interest and dividends, annuities, rental property income, social security, disability, unemployment, partnership distributions, payments on notes held and other business interests.

Monthly Expenses: Loan payments or rent, property taxes, home insurance, equity loans, utilities, home maintenance, homeowner association fees, food, water, auto payments and maintenance, gas, clothing and shoes, medical supplies and prescriptions, legal fees, monthly memberships, credit card payments, laundry and cleaners, auto insurance, pet food and care, insurance for valuables, life insurance, Medicare and Medicaid insurance, long-term insurance, subscriptions, books, entertainment, travel, barber and hair dressers, etc.

Carefully sorting out insurance issues can be important and it may be prudent to have help in doing so. Insurance matters can be complex and often people do not know all of the policies they have, which overlap or duplicate coverage, or which should have been cancelled or are no longer needed.

It can be extremely helpful to know if a policy covers hiring an aide, registered nurse, or other professional. We had a client who was going to sell their home because of looming costs due to costly full-time help for one of the senior family members. They were thrilled to discover that there was a fully-paid policy that included life care.

Some people prefer to feel self-sufficient and not use government support systems. 

However, if they can be helped to see that they earned the right to such benefits through years of successful living in this country, they may see it is worth the time and effort to apply for assistance. Social Security, veterans’ benefits, Supplemental Security Income, Medicare and Medicaid are all potential added resources that will in- directly help seniors remain in place.

There is one additional idea that may have merit for some families’ consideration. If elderly parents are not able to make ends meet or engage needed caregivers, their children may be in a position to provide sufficient funds to cover care and living expenses for as long as necessary. If the parents own their home and have other assets of value, the family members could work out a clear written agreement as to who will provide what funds that would be reimbursed from their parents’ estate at the time the proceeds are distributed.

These are merely suggested actions to help you gain a fuller understanding of the current situation and perhaps give you a better perspective of alternatives. Hiring an expert in financial counseling is well worth reasonable costs to gain a better understanding of how to manage assets and resources more effectively. It can also save tens of thousands of dollars in your family’s estate.

(Michael Edlen is a certified Seniors Real Estate Specialist. Call (310) 230-7373, or email Michael@MichaelEdlen.com)

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