As we all get older, an issue that becomes especially important at this stage of life is how to help clients protect their financial resources from an unexpected threat — themselves. One tool is to ask clients to sign a statement authorizing a planner concerned about possible irrational behavior to contact someone, such as a family member or physician, designated by the client. While this would not prevent a client from firing an adviser, it would provide a method of discussing the issue and also involve another person in the decision.
Another possibility is to put clients’ assets into either an irrevocable living trust or a Domestic Asset Protection Trust (in states that allow them) and naming someone other than the client or the planner as trustee. While the client, as the beneficiary, would have the power to fire the trustee, concern about a trustee being fired irrationally could be mitigated to some degree by having a corporate trustee. In addition, with a DAPT, the beneficiary client would not have the power to amend the trust without the agreement of the trustee. This would give some protection against self-destructive choices by a client who was gradually losing competency. One disadvantage of this approach is cost, so it isn’t an option for everyone.
Perhaps the most important strategy is to work with clients to create a contingency plan in the event of mental decline. It could include arrangements to consult with family members or other professionals such as physicians, social workers, and counselors. For clients without close family members, the plan might authorize the financial adviser to call for an evaluation, by professionals chosen in advance by the client, if the client’s behavior appeared irrational. This team approach might alleviate clients’ fears about being judged incompetent by the person managing their assets.
The possibility of mental decline is something no one wants to consider. Yet it’s as essential a financial planning concern as making a will. Helping clients build financial resources for old age includes helping them create safety nets to protect those resources from themselves.
When it comes to insurance, it seems like the journey’s never over. You hear about another type of coverage you need, and you’re pulled into an endless, money-draining exercise!
But here’s the thing: Did you know you could be your own insurance provider by becoming self-insured? No more unnecessary insurance premiums or jargon—just you, your savings and investments and a whole lot of peace of mind.
So, how do you get to being self-insured, and what should you self-insure?
What Is Self-Insurance?
Being self-insured means that you would have enough money to pay for anything an insurance company would usually foot the bill for.
Benefits of Self-Insurance
1. You’re paying less in premiums every year.
If you’re self-insured, you’re not paying an insurance company every year to carry the risk of insuring you. That’s a huge benefit to you, because you’re saving money! And we’re all about saving money where we can—especially on insurance premiums.
2. You’re financially independent when it comes to your investments.
Saving money on insurance premiums means you have more money to put into investments. And if they’re good investments (like a mutual fund), then that’s even better!
3. You can raise your deductibles.
Being self-insured means you can feel confident about raising the deductibles on the insurance you can’t avoid, like your auto, home and health insurance. If you raise a deductible, your premium will go down because you’re agreeing to pay more out of pocket toward a claim.
Fresno Financial Consultant Takeaways
Soutas Financial your Fresno financial planner would like to remind you of these great pointers: As we all get older, an issue that becomes especially important at this stage of life is how to help clients protect their financial resources from an unexpected threat — themselves. One tool is to ask clients to sign a statement authorizing a planner concerned about possible irrational behavior to contact someone, such as a family member or physician, designated by the client. Another possibility is to put clients’ assets into either an irrevocable living trust or a Domestic Asset Protection Trust (in states that allow them) and naming someone other than the client or the planner as trustee. You might also consider the benefits of self-insurance.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage Medicare long term care as well as risk management designed to help accomplish those goals.
When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno retirement plan consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax-Efficient, Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173 905978 – 05/21
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
Our firm is not affiliated with the U.S. government or any governmental agency. Individuals are encouraged to consult with a qualified professional before taking any withdrawals from their retirement assets or insurance policies.