By Christopher C. Humes, CPA | Baker Tilly Virchow Krause LLP

If you are reading this, chances are you, a parent, or an elderly loved one has accumulated a nest egg of assets that you wish to protect. Each individual’s situation is unique, so each individual needs to put a strategic plan in place that works for him or her.

No matter how much or how little a person has, there are threats and risks out there. For many, their home might be their biggest asset. So what happens when a spouse becomes seriously ill and may need long-term care? How can the healthy spouse stay in the marital house and still have assets to live on? Or what if a couple has a special needs child and wants to set aside assets to take care of the child after the couple has passed away? Another consideration is what happens if your loved one has accumulated a decent sized nest egg but is unfortunately connected with an unscrupulous investment broker who makes inappropriate investment decisions that further his or her financial interests rather than those of your elderly loved one?

These are just a few situations where a team of experienced professionals can develop solutions to protect hard-earned assets and shelter resources that may be needed down the road.

Putting together a plan of protection may seem daunting, but it can be accomplished. Try to approach it like putting together a business plan. Here are some suggestions for how to put a plan in place.

Determine Where You Are Now

Approach this effort by putting together a personal balance sheet of assets and liabilities. Identify assets, retirement plans, life insurance, and long-term care policies, as well as nonfinancial assets currently held. Then identify liabilities, such as home mortgages, auto loans, and any other debts. This is an important task as it may uncover “forgotten” assets, such as dormant investment and retirement accounts, that are now subject to new unclaimed property rules in Pennsylvania.

Identify What You Want to Achieve

Define and identity the priority issues that require immediate attention and focus. Include both short-term and long-term financial goals and the potential needs of the elderly person. Also, be sure to ask questions about the future now, while the elderly person has his or her faculties, so their wishes are known.

Identify a Team and Determine Who Is Accountable

You need to assemble a trusted team, and I emphasize trust here. Too often elderly people fall victim to all sorts of scams. My colleague John Steffee recently wrote in much greater detail in this space about the ways your elderly loved ones are often targeted by financial predators. So identify who is responsible for and accountable for implementing various the pieces of the plan. The team should include at least one responsible family member who is younger and who will look out for the elderly person’s best interests. A CPA and an attorney who specializes in estate or elder law should be part of the team. If the person has investment assets, the financial advisor should be part of the team. Yes, there is a cost to using the services of professionals, but the advice and potential dollars saved in taxes and other costs can far exceed the fees incurred.

Review and Make Changes

Once a plan is in place, it’s not over. There is no autopilot. Your elder’s plan must be revisited periodically -- at a minimum each year, perhaps more often whenever a significant or unforeseen life event takes place.

There is no asset preservation plan that fits all, because each family dynamic is different. But to repeat what Steffee has stated, “Vigilance is the best antidote. Stay in touch and provide an extra set of eyes and ears to those seniors so near and dear to you.”

Christopher C. Humes, CPA, is a senior manager at Baker Tilly Virchow Krause LLP. He has more than 25 years of experience serving closely held businesses and individuals as a trusted business and personal tax adviser. He is a PICPA member and serves on the CPA Image Enhancement Committee.