Voiceover: [00:00:00] Welcome to Metcalf Money Moment. The podcast unlock financial clarity and confidence with expert insights to achieve your goals. Hosted by Jeb Graham, Ethan Hutchinson [00:00:15] and Eric Wymore. Each episode offers decades of combined expertise in wealth management. Retirement planning and more. Join us for practical strategies to inspire your financial journey.

Now your hosts[00:00:30]

Jeb Graham: welcome back to Metcalf Money Moment podcast. My name is Jeb Graham, here with Ethan Hutchinson. And Eric, why more? How you guys doing today? We're here

Eric Wymore: doing great. Glad to be here. [00:00:45]

Jeb Graham: We're here. That's right. Another month, another podcast. This one I'm pretty excited about. I think, um, you know, every once in a while we'll have, go through a month and we'll have kind of a case study and we'll, we'll hit on this a little bit where, uh, we run into something that just kind of spurs the thought [00:01:00] of something that we want to talk about on the podcast that we think is maybe a good message to, to send out to our clients.

Um, and this month we had one of those. And really what we want to talk about today is protecting. Aging parents and grandparents and con [00:01:15] consolidation of accounts and, and their life, uh, as they get older. So, uh, to hit on that, you know, we're in a moment when the baby boomer generation, they're the largest retirement wave in history, is aging.

A lot of 'em have already retired. Some of them will be retiring. [00:01:30] Uh, they've worked hard, they save well, they've accumulated accounts all over the place. You talk about old 4 0 1 ks, old IRAs, multiple custodians, banks, CDs. Brokerage accounts, you name it, they've got it out there. Uh, with age, they become increasingly vulnerable to [00:01:45] confusion, complexity, and unfortunately to scams.

Mm-hmm. Uh, that's why consolidating accounts, streamlining everything into one coordinated plan and protecting seniors financially is absolutely critical. So we're gonna go through a couple of things today and each one of us is gonna hit on a [00:02:00] little bit of a piece of this, but I'm gonna start out here in a minute.

And just talk about, um, you know, consolidation of not only someone's accounts, but kind of, of their life, uh, makes a lot of sense, specifically as people begin to age. And then Eric's gonna [00:02:15] talk about protecting your assets and avoiding scams. And guys, I know. All three of us have had a client that has run into a scam that we've either found out during, uh, or after.

And it's, it's disheartening, uh, when it happens. But it's a, [00:02:30] an unfortunate reality of life that those things are out there. Um, and then Ethan's gonna talk about, you know, distribution, what happens, you know, after someone passes away in ways to kind of streamline, uh, that distribution. So that sound good with you guys?

[00:02:45] Absolutely. Well, very good. Well, let's, let's first talk about consolidation and why, uh, we feel like that matters. And specific, I say that consolidation kind of matters, uh, throughout somebody's life. I think it's easier to streamline your life that way, but I think [00:03:00] specifically as people get into retirement and as they get older.

Consolidation becomes, uh, more important for them. And, uh, when we talk about consolidation, we're not talking about just making life simpler for simplicity sakes, although that's a big part of it. We're talking about [00:03:15] reducing risk, reducing paperwork, and reducing the chance that something falls through the cracks for somebody.

So aging clients often have accounts everywhere, and that can create several problems. And I'm gonna go through a few of these, these issues. Uh, and things that I [00:03:30] think consolidating and choosing one advisor can really help with, uh, for an aging client. And, uh, number one is as you get older, most people, most boomers have required minimum distributions or they have IRAs out there that then eventually require a [00:03:45] required minimum distribution.

And for anybody that's not aware of what that is, a required minimum distribution is something that the IRS requires someone to start. Taking out of their IRA once they hit a certain age. Right now that magic age is 73. [00:04:00] It kind of graduates, I think a few years from now. It graduates to age 75. But when you do that, you have to take money outta your IRA.

You have to pay taxes on it. And the reason the government does that is because you got a tax break to put money into that IRA and now they want to get that tax revenue back, [00:04:15] you know, as much as they can during your lifetime. Well, what happens to someone when they have multiple IRAs in multiple places is that each one of those IRAs has a required minimum distribution associated with it.

So you either have to go out there [00:04:30] and take an RMD from each one of those IRAs, or you have to calculate on the total value of all the IRAs and take 'em out of one. The bottom line is, is when you have multiple accounts and multiple IRAs out there. Your chances of missing your required minimum distribution go up [00:04:45] dramatically.

And if you miss all or a part of whatever part of your RMD that you miss, you have to pay a 25% excise tax. So by consolidating. What we're hoping to do is number one, you know, streamline that for you so you're not having to go to four different [00:05:00] places to figure out what your RMD is. Number two is hopefully help you reduce the risk of having to pay an unnecessary tax.

Okay? So that's one reason that we really think it's important to consolidate. Number two. Is that, um, you know, when you have [00:05:15] multiple accounts at multiple places, and I, I'm gonna go to this case study, you know, that, that we just had. And what this, this was was an individual that I've worked with for 20 years or so, and she.

Was married. Who, who now her husband has passed away, but [00:05:30] he had his own advisor. Right. And they, they liked that separation, which was totally fine with me. Totally fine with everybody. Well, he passed away a couple years ago and she doesn't have a great relationship with this other advisor. Right. And so, however, she still has the [00:05:45] account there and we're talking about consolidating.

But what we discovered when we were going through this is that she had. You know, over a million dollars between three different banks. She has, you know, over a million dollars with us. She has well over a million dollars with this [00:06:00] other advisor from this IRA, and the reality is she's getting, you know, so, so you think about all the different.

Tax statements that she gets from that. She gets it from three different banks. She gets it from us, she gets it from the other person. She also has an IRA here, an IRA at the other place. So she's [00:06:15] got just a lot to keep track of. So when you think about come tax time, the less 10 90 nines in paperwork that you're gonna get during that time, the less the chances are that you're gonna overlook something and that you're gonna end up having to go back and refile taxes or even worse pay [00:06:30] pet.

Pay tax penalties, uh, or something like that if you get audited. Um, and then, you know, lastly, when you think about that individual situation, think of all the paperwork. I know when we get clients, we're always encouraging them to go paperless, but there are [00:06:45] some people in the baby Boomer, and I'm sure Eric and Ethan, you guys have run into a few of these clients, specifically in the baby boomer generation that are not comfortable being online.

They still want to get those paper statements right. Well, so you think about that particular individual. How many different paper [00:07:00] statements they're getting. They're getting three from, from us. They're getting two or three from the other advisor they're getting, uh, 'cause they have multiple accounts at all these banks.

Probably nine total statements from these banks. I actually went over to her house to help her kind of get organized. And there, if you would've [00:07:15] seen the stack of papers, it would be hard for anybody to keep track of. And so, um, so I would say too much paperwork. And, you know, I would also kind of dovetail on that when you're looking at, um.

Go, you know, getting [00:07:30] online and paperless versus getting paper statements. You know, I think a lot of people want to get paper statements because they feel like it's more secure than being online. And I would actually be the contrarian there and say, I think that you're probably better off getting online statements than you [00:07:45] are getting paper statements.

'cause I think a paper statement that's going through the mail, um, you know, that's in your house that gets thrown away in the dumpster or whatever it is, has, has a greater chance of being compromised or at least. An equal chance of being compromised of as someone, you know, [00:08:00] hacking into your, into your accounts and things like that.

So, and then, you know, LA lastly, and I, I'll, I'll finish up here, but I also think that General Organa organization with. Human beings declines with [00:08:15] age, right? Like it's, it's easier, you know, when you're younger and you're working, you have a lot of things going on in your life. It's easier to stay organized when you have more going on, which sounds kind of contrary to what it should be.

And as p as people get older and as they, they do begin to experience cognitive [00:08:30] decline, which everyone's going to, I'm going to, you guys are going to, our parents are going to, that's just the way it is. Um. I think, you know, being able to stay organized becomes harder, and that's why, you know, I, I really make the case for choosing one [00:08:45] advisor.

And if you, it's not that you have all your money with one advisor. You have one advisor that knows where everything is, right, that knows where everything is, and that can help. Kind of quarterback the entire situation. But I think what that's gonna help do is it's gonna help you coordinate your RMDs, [00:09:00] like we talked about.

It's gonna help avoid unnecessary taxes. If you were to miss an RMD, if you do give to charity, it's gonna help implement the qcd or qualified charitable distributions from your IRA because now you've got one IRA in one place and you're, [00:09:15] you've got one RMD, and then you can figure out what your qualified charitable distributions are.

It's gonna help you make sure you, your beneficiaries are correct on every account. Think about that one individual that has 30 different accounts out there. Are we sure that the beneficiaries and the TODs are correct [00:09:30] on all those and up to date? And if you make a, if you decide to change your mind, man, that's a heck of a process to go through at that point in time.

Also you're stream streamlining risks. You're limiting 10 90 nines and then you're pairing down, you know, the paperwork that you're gonna get. [00:09:45] So, um, you know, that's our case for, for consolidation with, with aging, aging clients. And I would say with any client and, um, you know, now maybe we can talk a little bit about just scams out there, protecting assets and things that clients can do.

Eric Wymore: Yeah. Ab [00:10:00] absolutely. And again, you know. What we're seeing and, and, and what we're seeing out there is one of the most overlooked risk aging clients face is financial vulnerability. You know, seniors by far and away are one of the most targeted groups [00:10:15] for scams. And, and I'm, I'm gonna share a few scams that we see out there.

And I also wanna share some things for, for people to look for, for red flags, uh, that they need to be aware of. And, and then I also wanna share a few things of how to, uh. You know, what, what you need to do, uh, to [00:10:30] help kind of prevent some of this or to protect your assets. And, and, and one of the more common scams that you're starting to see out there, at least in the last few years is the government scam.

I mean, this is a situation where an individual will receive a phone call from the IRS, in quotes, [00:10:45] social Security Administration, or the Medicare or Medicare, and they're claiming that there's a problem, right? Claiming that there's a problem that demands immediate attention and immediate payment, um, or some kind of personal information, you know, that should set off a red [00:11:00] flag, right?

Why is that? Because the government doesn't ask or will never ask for payment and gift cards. But they'll never ask for demand payment or immediate payment, right? That's not how they conduct business. Um, so that's a red flag [00:11:15] to be aware of. Um, another scam that is pretty common. It's an awful one. They're all awful.

But this is a grandparent scam, or the family emergency scam. This is where you're gonna, you know, grandparents will receive a call from a [00:11:30] grandchild or if. Friend of a grandchild saying that they've been in anju an accident or they're they've been arrested, or they're hospitalized or they're stranded somewhere, and.

They need immediate payment for something to get them out of trouble [00:11:45] or to get them into the hospital, and they don't want to talk to mom and dad right now. They're nervous. They're, they wanna only talk to you. And, and we're seeing situations where AI is actually cloning voices right now. And making sure that, you know, so that sounds like the grandson [00:12:00] or the granddaughter or the friend.

Um, one way that you can, you know, counter attack this is just to have a family word. A family code word. Right. That only the family would know. And then if that family code word is said, then you know, it's a real event. Um. [00:12:15] Another one scam that happens a lot is tech, right? Tech support. Uh, where all of a sudden you'll just see a popup that says you've got a, a virus or you got an email that you looked at and it's a virus, and, and, and you need to, to protect your [00:12:30] computer.

And all of a sudden there's, you know, a situation where you can give control of your computer, uh, or computer access to someone online that will help clean up your computer. That's a scam. Right. Unless you know that person, that's gonna be a [00:12:45] scam. Uh, you never want to give control to your, of your computer, uh, or access to someone else.

Um, they're gonna be behind the scenes, draining your financial accounts, finding your passwords, all of that stuff. So be wary of that. Um, we say a lot of fake charities, [00:13:00] honestly, it's awful, but it happens. A lot of fake charities pop up. Uh, people will send money to them. They're not real. Um, they might have a, a, you know, pretend documents or a 5 0 1 C3 that they say they are, but they're not.

Um, you just gotta be a little leery of that. [00:13:15] Uh, we also see, you know, the. This is a, another big one that we'll see every once in a while is the home repair or contractor scams. Um, a lot of good people out there, don't get me wrong, but a lot of times they'll walk in with an [00:13:30] HVAC and it's, you know, 50 bucks to do a service and all of a sudden there's, you know, you got a problem with some kind of cracked thing and it's needs to be fully replaced because there, you know, dangerous gas is going into your house and all of a sudden it's a [00:13:45] $25,000 new system.

Well, really in reality, it might be $150 part, right? Those are scams that happen to people and get taken advantage of just because of their age. And so you gotta be aware of that. And I think, you know, if, if you're dealing with [00:14:00] financial elder abuse, here are some things that you need. To be aware of or, or, or some, some red flags, um, that pop up.

You know, what we look for and what you can look for, um, with your parents is unexplained [00:14:15] withdrawals or checks that getting written. One I just explained, all of a sudden, $25,000 comes outta the account. Well, what's that for? Right. Um, that's never happened before. What are, what, what's going on? Those are just, you know, some of them might be legit, but you just gotta [00:14:30] understand why.

What are those unexpected withdrawals or checks? Uh, if there's any sudden change in spending patterns. That's a, that's another caution flag that we look for. So, if an individual has a monthly withdrawal of a thousand dollars and they've [00:14:45] had that for years, and then all of a sudden they start taking 5,000 out.

10,000 out, 20,000 out. What's going on. Right. Could be legit. Absolutely. We just want to kind of know what, what's been a change in your spending pattern? Um, this is one that [00:15:00] I've witnessed. Um. As a new friend or quotes friend or caregiver becomes overly involved with finances, uh, that is a situation that unfortunately has happened or does happen, and again, you just wanna make [00:15:15] sure that family members are involved, um, with that, uh.

There also becomes a time where they might be, feel pressured to change beneficiaries, feel pressured to change the will or trust, um, or who, who becomes the [00:15:30] ownership of the account. That's another caution flag that needs to be, be, uh, investigated. Um, and Jeb, you mentioned this earlier, you know, all of a sudden maybe the senior, maybe the, the, the, the, uh.

Client becomes a little confused, right? A [00:15:45] little confused with what their, what's going on in their financial situation. They used to be on top of it all the time, and now they're just a little bit confused with where things are. Um, that's certainly a warning sign that you need to be aware of. Um, and then always if you go over to the house and all of a sudden there's just some [00:16:00] missing jewelry or cash or statements, anything like that, that's missing, that's obviously.

Definitely a red flag and, and, and to be aware of. Um, so what can you do? What can families do? What can advisors do, uh, to help protect? Again, that [00:16:15] we've kind of touched on those, a few things, but have regular reviews with your parents, advisors, financial advisor, right? Uh, go to the meetings, ask to go to the meetings.

Um, meet, meet that advisor on your own. Uh, you [00:16:30] know, if you know and like, and, and you trust them and they don't feel snaky or sleazy, then most likely they're gonna do a good job for your parents. Um. Ask for permission to become a trusted contact. Uh, what that is, is that trusted contacts [00:16:45] gives the financial institution the authority to contact that trusted contact to let them know if there's some suspicious behavior.

It's not. Or suspicious transactions. It's, they don't get access to the accounts. They don't get a, you know, [00:17:00] authorization to do any, you know, act on your behalf. Um, just they get to be allowed to be notified if there's some suspicious behavior. Um, the other thing you can do is add a POA power of attorney.

Uh, that does allow you to have, you [00:17:15] know. They can conduct business on your behalf. Um, you can set up their accounts for, for alerts, uh, if there's any kind of like large transactions. That you get alerted. Uh, you can also freeze credit. That's another good idea. Maybe freeze [00:17:30] your credit card, you know, freeze credit so they don't get any new outstanding loans, uh, credit cards and so on.

And, uh, there's also simple language that you can tell your parents or your elderly to, to say when they get contacted by this. And [00:17:45] just use stalling language. Simple as I don't give financial information over the phone. Let them remind them to say that, or my advisor handles that. Or I need to check with my son or daughter or financial advisor [00:18:00] first before I do anything like that.

Or finally, just please mail me something official. I don't make decisions over the phone. So anything you can do to protect your, your, your, your client's assets or your elder's assets is something [00:18:15] that we, we, we strive for every day. And you know, now the next big question comes is what happens when they pass?

And that's, that's something that Ethan's gonna take on.

Ethan Hutcheson: Yeah. Yeah. Thanks Eric. Yeah. One thing that, that Eric said, and, and Jeb will probably hit on it too. It's, it's, [00:18:30] there's a lot that can go wrong. Um, and there's a lot that can go right in these situations and, and one of the most important things that we always stress is have the conversations while you have the bandwidth.

And while you have that mental capacity, um, you don't [00:18:45] want to be. You know, 85, 90 years old, losing that capacity and then have those conversations with your kids. You, you can share as little as much information as you want, but have the conversations and, and that that will take you. Miles, uh, beyond, beyond [00:19:00] anything.

Um, as far as, uh, um, inheritance goes. So distribution and post, post death logistics. I love the word logistics 'cause it's not, it's not as easy as just signing over the money and or writing a check to your kids or, or however that works. There's a lot that that [00:19:15] goes into it. Um, you're gonna need to collect account statements.

You're gonna need to open, um, accounts under your names. That you can properly inherit some of these, uh, accounts. Um, you're gonna be working with cost basis on, uh, taxable monies, um, selling property, real [00:19:30] estate. Um, you're gonna be collecting, um, goods. There might be jewelry or stuff in lock boxes across many banks or however that works.

So having those conversations and, and, and stress that consolidation is something we're, we're trying to. Trying to to, to get across [00:19:45] the, the table today. Um, why does consolidation matter? Well, there's, we, we, we like it when there's one place to go. When, when we have a client that passes away or vice versa, a client's parents that pass away, typically, you know, we're, we're talking to 'em about their bank account, [00:20:00] their advisor, where that, where that money is, and then maybe some property and some real estate or some cars and things that are getting passed down.

Now, if that. Parent or, or client has five advisors or to jeb's, uh, situation I was talking about earlier. Three banks, two [00:20:15] advisors, cash at home, whatever it is now, there's just more complexities that are involved and it's not as easy as just opening that one account. You're really having to hunt things down, making sure the beneficiaries are in line, and then you've gotta give death certificates to another 12 people that you probably didn't have to [00:20:30] do before.

So there's a lot more legwork for your children or for you, uh, depending on, on, on which side of the table you're sitting on. Um, consolidation allows beneficiaries to stay, stay consistent, whether you've got all of your assets going to a trust, whether you've got all your assets [00:20:45] going to your spouse or a non-spouse or a charity or your children having one place where you can understand that and every time you sit down for a review, you say, Hey, just wanna double check my beneficiaries.

We can do that for you. We don't have to call six other banks to make sure that your [00:21:00] TOAs and things are, are, are in place over there faster and cleaner. Uh, is is one huge benefit from, um, consolidation. Inheriting money's not clean. It's not easy. It, it, it, there have been in cases where [00:21:15] it's gone quicker than others.

I. We've settled the estate in months, we've settled the estate in years. Um, there are states that we've, states we've been working on for five years, um, because it just wasn't done properly at the beginning. And, and the more time you spend on the front end, the [00:21:30] easier it is on the back end. So making sure you've got all that stuff buttoned up so it's faster and cleaner.

Time is money. If money is sitting in limbo between, um, inheritance and we've got a. Three year bull market, uh, and you miss out on a 30% return because the money was sitting there [00:21:45] inside of an account that you couldn't trade because the beneficiaries weren't aligned or whatever. That is that, that, that can add up over time and become real money, um, clear instructions.

We, we make sure that, to Eric's point earlier, the trusted contact, we know. Who, who we're talking to on the other end of the [00:22:00] line. Um, we, we understand, you know, if we're consolidating those accounts and bringing things over, we've got clear direction, clear instruction that when, when something does occur, a passing or an inheritance situation, we know where the money's gonna go.

We can reach out to those individuals and we can have [00:22:15] that clean conversation. Um, coordination between retirement and non-retirement assets. This one's pretty big. Um, as far as consolidation goes, and this, this can go. Pre, um, death as well as post death if you've got taxable money between [00:22:30] multiple advisors.

Let's say we're doing some tax loss harvesting for one of our clients, then they've got another advisor that's, that's doing some tax loss harvesting and they're realizing losses and realizing gains within a particular tax year, but those advisors aren't communicating. Um, then there's, you know, [00:22:45] potential big tax implications that can come from that.

Let's say you only wanted to realize $50,000 in a, in a particular tax year. Well, you told your other advisor the same thing. Now you're realizing 50, sorry, a hundred thousand dollars in gains that year. That [00:23:00] can be huge. You could have a really big mistake in that tax year because those advisors typically don't, don't communicate.

So making sure that the coordination in those non-retirement accounts is buttoned up, I think can go a long ways. Um, and that's an easy thing to do if you're consolidating [00:23:15] those. Taxable monies. Um, having all that in one account is probably definitely the direction to go. So bottom line, talk about these things early.

Make sure you are aware where your parents' assets go and make sure you're aware where [00:23:30] your assets go. And a lot of this can dovetail all the way back, uh, to our conversation with Eric Rome a couple months ago in estate planning, but make sure it's buttoned up. And the less problems and the less cooks in the kitchen, the better it is for everybody involved.

Nice.

Jeb Graham: Well, good stuff. And I think [00:23:45] if we're gonna just kind of conclude with, you know, take all this and kind of put it into the most important thing, right? If you're, whether you're an aging parent or whether you're a caretaker that's helping an aging parent, aging grandparent, there's kind of four things that I would say.

You gotta either [00:24:00] communicate to your, your children, or, uh, if you're the child, you need to know it's where are the accounts, what's the plan? Who are the beneficiaries and who is the advisor? And what we'll say in these circumstances is that [00:24:15] silence. Creates confusion and communication will create clarity.

And we've said this before and we've done this many times, is that if we have a client out there that wants us to facilitate that conversation, uh, between themselves and their their kids, we can certainly do that. And I think [00:24:30] that's a really good place to start is, is whether you're just sitting down with us.

If you're sitting down with us in conjunction with the estate planning attorney and possibly the accountant, uh, those are great ways to just start off that conversation and make sure that everybody's on the same page. So, but I think this has [00:24:45] been super good information and, uh, really productive and, uh, this has Metcalf money moment signing off.

Voiceover: Thanks for tuning in to Metcalf Money Moment, the podcast. [00:25:00] We hope today's episode provided valuable insights to help you unlock financial clarity, confidence, and peace of mind. For more expert advice and resources, visit metcalf partners.com. Until next time, make every money moment count.[00:25:15]

Disclaimer: Jeb Graham, Ethan Hutchinson and Eric Wymore are registered representatives with and securities offered through LPL Financial Member FINRA SI PC Investment advice offered through W CG Wealth Advisors, a registered investment advisor, W [00:25:30] CG Wealth Advisors and Metcalf Partners Wealth Management is AR separate entity entities from LPL Financial.

The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual to determine which strategies or investments may be suitable for you. Consult the appropriate qualified professional prior to making a decision.

All performance [00:25:45] referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.