Wednesday, August 6, 2008

New York Financial Diary: Protect Your Assets

by Alexandra Lebenthal

Recently New York Social Diary wrote about two women
who in their later years apparently have had their fortunes taken over by unscrupulous advisors who are controlling (and spending) the money.

Most of us are well versed in the tragic case of Brooke Astor whose own son, along with an attorney, have been reported as taking over her fortune and reducing this gracious doyenne in her later years to an example of what can happen to the once rich and powerful as they lose their faculties.

How can people protect themselves from losing their money especially in later years when trusted advisors may be needed more than ever? Here are a few suggestions:

Review your will now. One of the concerns that can come up when a person ages and makes changes is the question of whether they were of sound mind or was someone pressuring them to make decisions they would not otherwise have made. Ensure that your wishes will be followed. If you are already advanced in age make sure that there are several witnesses to your sound judgment if you are making changes.

Set up trusts that spell out clearly what the provisions of the trust are – who can take money and assets out, what happens if you become incapacitated, what your general wishes are. Make things as specific as possible. A living trust protects your assets while you are alive. Your will determines what will happen to them after you are deceased. The former can be as if not more important than the latter.
Many banks and investment firms have trust companies which can act as Trustees. If there is a request for the Trust to make a distribution the Trustees must approve it and ensure that it is following the terms of the trust and the beneficiaries. Having had personal experience with this type of structure I can attest to their diligence. It is also possible to have co-trustees who are family members or friends and can act in concert with the co-trustees.

Involve your close trusted friends in what your wishes are and ask them to protect you. I write this with some trepidation because those might be people that could take advantage of you but at the same time in the Astor case clearly brought the public and court attention to the abuses going on.

Having financial professionals and advisors be they private banker, trusts and estate attorney or financial advisor –that are all aware of your needs, assets and wishes can actually serve to keep one another in check.

There are many small firms that specialize in accounting, trusts and investments but at the same time make sure that any firm you deal with has a reputable reputation to ensure that you are dealing with people who indeed have your interests at heart.

(Alexandra Lebenthal learned from her Father Jim Lebenthal and Grandmother before that about the basics of finances and investments. Today she is the CEO of Lebenthal & Co., LLC and its wealth management division Alexandra & James Co.)