Pennsylvania has one of the oldest populations among the states; as of 2020, PA ranked number 9 in the nation, with 19.1% of its population over 65. Given these statistics, it is important for every CPA or accountant in Pennsylvania to be familiar with key issues regarding elder care and estate planning for their clients.
It’s not just your elderly clients who may need help; your younger clients may come to you in a panic when Mom or Dad suddenly falls and needs long-term care or shows rapid mental deterioration and can’t handle their finances anymore. And of course, death comes to us all, eventually. Often, an adult child of parents who have not planned ahead finds himself or herself at a loss on what to do and will turn to you for help.
Planning ahead
Make it a goal of your practice to inform your clients of the importance of estate planning. Encourage them to think about it for themselves and to talk to their parents about it as well, to make sure they are thinking ahead, too.
Areas that your clients should think through in order to pre-plan include:
- Choosing a long-term care facility, should the need arise, and setting aside funding for that care.
- Considering additional health care coverage for long-term care, disability, etc.
- Creating a “living will” and advanced directives according to their particular wishes and setting up medical powers of attorney and financial powers of attorney.
- Financial planning options, including everything from planning distributions to beneficiaries, setting up trust funds, investments, tax-deferred options, and investing in assets.
These decisions may need to be adjusted, depending on changes in health or family situation. Encourage your clients to set up a yearly meeting with you and with their loved ones to discuss these decisions and make adjustments as needed.
Helping when there is no plan
It is difficult to discuss death, disability, and dementia with one’s aging loved ones, so you may have a number of clients who, having avoided the discussion, now find themselves or their parents in a difficult position. You are in a position to help.
It is challenging to jump in once a crisis has occurred, but it can be very satisfying, professionally as well as financially, to help an elderly person or the children of an elderly person organize their finances, make plans for the future, and help the older person have a comfortable life while protecting their assets for the beneficiaries.
Depending on the person’s needs and your interests and expertise, you can provide a variety of services:
- Provide bookkeeping services (or subcontracting the services) for elderly clients who are having difficulty keeping everything straight.
- Help the family evaluate the options for care, based on the recommendations of doctors and the availability of family help: live-in help for someone who shouldn’t be alone; frequent home visits by a nurse or therapists; parent daycare while the grown children are at work; hybrid of family and paid supervision; assisted-living facility vs. nursing home, etc.
- Review financial documents for any signs of elder financial abuse: fraudulent credit card charges, identity theft, Ponzi schemes, embezzlement, extortion, Social Security fraud, Medicare fraud, and the like.
- Evaluate existing financial and estate planning and advise changes to protect both the elderly person and their beneficiaries.
- Reconstruct financial records for the last few years in a situation in which an elderly person has not been maintaining adequate records in order to help the family know the person’s real financial situation.
- Help a client through the financial reporting requirements of guardianship in Pennsylvania.
PSTAP offers courses to help accountants and CPAs fulfill CPE requirements as well as become educated in new areas to grow their practices. Visit our course catalog for upcoming courses on elder care, ethics, and other pertinent subjects to help you maintain the highest quality of professional competence and to expand your knowledge base.
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