Financial advisers working with elderly clients should take heed of the legal brouhaha involving former astronaut Buzz Aldrin and two of his children.
Mr. Aldrin, 88, who set foot on moon during the 1969 Apollo 11 mission, has gone to court to try and prevent two of his children and a former business manager from taking control of his assets and financial responsibilities.
Michael Whitty, a partner and estate planning attorney at the law firm of Handler Thayer, said these kinds of messy family conflicts can often be avoided by creating a revocable trust that includes an independent co-trustee, such as a distant relative or non-family member.
"If there is any potential for the children or a second spouse trying to seize control of assets or a business interest, I would put into place this revocable trust with a co-trustee," he said.
A revocable trust is an agreement that is amendable by the person who created it. A co-trustee, sometimes called a successor trustee, would take charge of overseeing the trust once the original author died or became incapacitated.
"For income tax and estate tax purposes, the revocable trust is ignored but for legal purposes, in terms of who is in charge, it is respected," Mr. Whitty said.
Mr. Aldrin, who has three children and has been married and divorced three times, has filed a lawsuit accusing his son, Andrew Aldrin, and his former business manager, Christina Korp, of misusing his credit cards and transferring several hundred thousand dollars from his businesses into their own accounts.
Last month, Mr. Aldrin's son and daughter, Janice Aldrin, requested to be appointed as co-guardians of the former astronaut, citing his diminished mental capacity, according to reports.
"Money brings out the worst in everyone, and as a wealth adviser you must be proactive in these kinds of things," said Jim Caldwell, a wealth adviser at Carson Group's wealth division.
Mr. Caldwell, who works with more than two dozen elderly clients, said it is often a delicate balancing act to respect the elderly client but also do the right things to protect the assets.
"When you've had a client for a long time and you start seeing them struggle a bit, it pulls at your heart strings," he said. "When I see things aren't clicking, it's difficult to approach them. But if possible, I try to include relatives or close friends at client reviews and meetings, and then I follow up with emails to summarize what we've discussed."
Mr. Caldwell recalls a recent example, when he called a client's daughter because he noticed the elderly client was starting to show some confusion over financial matters.
"You can't just turn your back on it and hope it will work itself out," he said.