Advisers who can play multiple roles ideal

Taxes, estate planning, investments among areas where expertise is needed

Dollars & Sense

July 28, 2002|By Liz Pulliam Weston | Liz Pulliam Weston,SPECIAL TO THE SUN

I'm having difficulty finding a good accountant or financial planner. I've handled most of my mother's affairs for the last 10 years, but I'm concerned I may be making mistakes without knowing it. Considering my mother's age and infirmity, I am reluctant to make drastic changes in her finances on the recommendations of a planner or accountant whom I don't really trust. I'm not comfortable using the Yellow Pages or relying on word of mouth. How do I know the people giving recommendations know any more than I do? My mother lives in a different state, which complicates estate planning. Thanks in advance for any help or direction.

There are a few professional designations that help separate the wheat from the chaff. Although the following information is far from exhaustive, it should give you a place to start and point you to advisers who meet certain education, experience and ethics requirements. You still will need to interview prospective candidates to make sure you're compatible and that they have experience dealing with clients such as you and your mother.

Ideally, you could use a whole team of professionals: an accountant to deal with tax issues, a planner to talk about investments, an estate-planning attorney, an elder-law attorney and a geriatric case manager to look after your mother because you're not close by. In a perfect world, this team would work together as a smoothly functioning unit to help you fill in the gaps in your ability to help your mother, and it wouldn't cost you a fortune.

Because the ideal isn't always possible, you might want to find a few advisers who can fill more than one role, such as an accountant who specializes in financial planning. Certified public accountants who hold the personal financial specialist (PFS) designation might fit the bill. You can contact your local CPA Society for referrals or visit www.cpapfs.org.

You also could call the National Association of Personal Financial Advisors, a select group of fee-only financial planners who can be reached at 888-FEE-ONLY or at www.napfa.org. Most of these advisers can refer you to a good accountant.

Good financial advisers will have some training in estate planning, but you probably will need an estate-planning attorney, too. Call your local bar association for a referral to an attorney who is a certified estate-planning specialist. It would be great if the attorney also is a member of the National Association of Elder Law Attorneys, which you can find at www.naela.org. This specialty deals with the financial, health and legal issues faced by people in their later years.

Geriatric case management is a relatively new but growing profession that caters to folks who are trying to help a relative from long distance or who are baffled by many of the day-to-day care issues of dealing with the elderly and infirm. Geriatric care managers can help you hire and monitor aides to assist your mother at home, for example, or research nursing facilities if she's no longer able to live alone. You can get referrals from the National Association of Professional Geriatric Care Managers at 520-881-8008 or www.caremanager.org.

We are a childless couple in our early 50s. My wife is retired and our goal is for me to retire by age 65, if not sooner. Our retirement assets so far total $285,000, and we have more than $200,000 of equity in our home without any outstanding debts, other than our mortgage. For the last several years, we have employed a strategy of buying a new home, occupying it for two to four years and then selling it. Our concern is that this strategy might not be very sound as we get closer to retirement. As housing prices increase, we feel that we might be forced to downsize or move out of the area to maintain a reasonable mortgage payment.

Each time you sell a home, you lose about 10 percent of the value to commissions, fees and moving expenses. That's a substantial setback, and you need substantial home-price appreciation to offset those costs. Unfortunately, very few real estate markets remain hot enough to make your strategy financially viable for the long run. That's why most people are better off staying in homes as long as possible and building up their equity, rather than siphoning it off by moving every few years.

Most people in your situation would be looking for ways to build their assets and pay down their debt rather than looking for another home with another 30-year mortgage. (Think about this: Do you really want to be making mortgage payments in your 80s or even 90s? If you're comfortable with that, fine. But many retired people like the security of a paid-off home.) Moving less often would free more money to put into your retirement funds.

You can get a rough idea of whether retirement at 65 or earlier is feasible by checking out retirement planning calculators on the Internet. The Financial Engines calculator at www. financialengines.com is a particularly robust one that uses probability analysis to figure out your chances of retirement success.

You also can pay one of the leading mutual fund companies - such as Vanguard or T. Rowe Price - $500 for a retirement-planning review or hire a financial planner to give you a more customized look at your possible futures.

Liz Pulliam Weston is a columnist for the Los Angeles Times, a Tribune Publishing newspaper.

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