On Mother’s Day, reflect on family finances

It is a good time to revisit estate and financial plans.

As we celebrate Mother’s Day, it’s a good time of the year to reflect on two key issues impacting each family’s finances.

First is your estate plan and a revocable living trust, which applies to both traditional families (those formed through legal marriage/adoption) and non-traditional families. A revocable living trust sets the foundation for your financial and legal future as it can shield your assets from probate (if funded properly) and allows you to give advance directives on how you want these assets to be used in case you are unable to make those decisions on your own. Most importantly, it allows you to appoint a successor trustee that doesn’t have to be a traditional family member. Ultimately, what legal framework you need depends on where you live, but our office can make sure you are referred to appropriate counsel. While our society continues to evolve on the image and definition of what constitutes a family, our legal system has not always kept pace.

The second issue is ensuring your financial plan is up to date. This goes beyond adjusting how much money you save or which debts to pay off first. A comprehensive plan includes a set of achievable short-term goals (e.g. achieving a balanced budget, paying a weekend trip in cash) along with necessary long term goals like saving for a future child’s adoption and education. It should also coincide with a review of what level of risk/reward you want to take in achieving that goal. While it’s a common tendency that people invest more conservatively as they get older,  for a certain goal, that may not be the case. Your general financial plan should be checked on an annual basis, while an associated investment plan should be reviewed at least quarterly.

As you reach out to your mother or the mothers in your life, whoever that may be, it may be timely to ask about how their estate and financial plan is going. Unfortunately, as the Baby Boomers begin retiring, the country is experiencing a surge in Elder Abuse. This often involves distant family members or robocallers extracting money and control away from unsuspecting seniors. 

Recently, the Securities and Exchange Commission introduced new rules requiring major financial institutions to ask older adults to appoint a trusted contact. A trusted contact cannot transact in your account, but if a concern arises your financial institution is authorized to raise its concerns with that individual. While it may not be a hot topic on Mother’s Day, it is surely an important discussion to have to protect the ones we love.

Alex Graham is a Principal at Graham Capital Wealth Management, a registered Investment Advisor located on K Street. Reach him at 202-780-7726 or Alex.Graham@grahamcapitalwealth.com.

Published at Sat, 11 May 2019 14:52:40 +0000