Written by: Deborah Cartisser
Over the years, I have worked with several people who have been single as they headed into the latter portion of their lives. Some had the support of close, trusted family members or friends and some did not. Some were successful at living out their lives the way they intended and some were not. Planning doesn’t always mean that everything will turn out the way you want, but it can go a long way to ensure you have the support you need to live the way you intend. With longer life spans, women are more likely to outlive their male partners. Regardless of whether you are single or in a relationship, we all need to spend time thinking about how to set ourselves up to be cared for by others. What are the ingredients for creating a successful support network? Are you prepared?
Take Inventory
Do you have people in your life that you trust implicitly? Who are those people and what role do they play in your life? Do you have family members or friends you do not trust? Most people do. You need to assess who can help you and who you want to put in place in different roles to help you. As you consider these individuals, try to be as objective as possible. Don’t turn a blind eye to things like your child’s controlling spouse or the relative who drinks a bit too much. Do they live close by or are they far away? You have two primary roles you need to fill: financial and health care. One person can fill both roles. Most importantly, you need to consider yourself and your needs, rather than the feelings of the people who may feel badly if they are not chosen. It’s common not to have someone you trust enough to hand over the control of your healthcare and your finances, so don’t let that stop you from making a plan. If this is your situation, you should enlist the help of professionals.
The Cost of Doing Nothing
Human nature coupled with our death-fearing society means that many of us will put off our planning for old age and death, until it’s too late. While it may feel uncomfortable to think or talk about, we all have to face our need for help as there are costs associated with ignoring this planning. Not appointing the people you want to help you, means you just may end up being cared for by the relative you never got along with who always has their hand out. If there is no obvious person empowered to help you, the court may decide who should care for you. Without an estate plan in place, you may have all your assets tied up in the probate court for months and perhaps years rather than disbursed to the people you care about. I have seen family members fight over the care of a wealthy relative, carting around an elderly person with dementia to various banks to empty accounts and take the money. I’ve seen elderly people get moved to cheap care facilities just so the inheritors can get more of the estate. It’s heartbreaking and it can be prevented if you plan in advance and take time to consider what you want.
Simple Estate Documents
At a minimum, you need to appoint a health care proxy, a durable power of attorney, and a personal representative. You need to go to an attorney, who practices in the state where you live, to draft these documents for you. The health care proxy makes health care decisions for you when you can no longer do so. You have the opportunity to spell out how you want to be cared for in specific situations. Take the time to think about it and put it in writing. The durable power of attorney takes care of your financial decisions if you become incapacitated, but are still alive. This power ends when you die. Your personal representative is the individual responsible for settling your estate after you die. You should assign back-ups to these roles. If you don’t have enough trusted individuals, you should appoint a professional trustee or fiduciary to serve in the financial roles. If there are people who you do not want caring for you because they are untrustworthy or you are estranged, put it in writing. If you want to do a little additional estate planning that will be more helpful, create a revocable trust and assign a co-trustee. This creates an entity that you can change while you are alive (and competent) and offers seamless control of your assets while you are alive and through the estate settlement process. It also allows you to avoid putting the trust assets through the probate court. Appointing a co-trustee to serve with you allows them to step in should you become incapacitated. Be sure to retitle your accounts to the trust name once you create the trust, or the trust will not govern those assets. This is the step people often overlook, and doing so can create more problems.
Decide How You Want to be Cared For
Do you want to age in place at home? If so, do you need to make modifications to your home to accommodate you and your care givers? Who is going to manage your care? Do you have enough to afford your plan? If you want to eventually live in a care community, select it in advance. They typically have mental acuity tests and often waiting lists. Have your plan in place before you need it and put it in writing. Spell out what you want and why. Make the person responsible for your finances and health care aware of your plans. Don’t put this off because you’re afraid of the discussion. I have seen people wait until it’s too late to express their wishes because they no longer have the mental capacity to make decisions. If you want to be cared for at home and you have no one to oversee the care team, enlist a senior care manager before you need them to step in. We work with these providers a lot and it makes life better for our older clients. Make a plan, write it down, and give the written instructions to your trusted individuals.
Form a Team
Death and diminished capacity are 100% guaranteed. Regardless of how well you age, your mental and physical capacity at 85 are below where they were when you were in your 50s. You will need help and assembling a team of professionals in advance of needing it will increase your likelihood of living the way you intend. You should have a financial advisor, a CPA, and an estate planning attorney. We meet do-it-yourselfers all the time who have amassed wealth, prepare their own taxes, and created estate documents decades ago. They come to us when things are falling apart, or they have received a bad health diagnosis. Sometimes it’s too late to put things in place to help them. Many people think they are capable of managing their financial affairs long past when they are actually able to do so. This is when costly mistakes can happen or people take advantage of them. It’s not as unusual as you think. Get a team in place, ensure they communicate with each other, and give them copies of your written plans and estate documents. Put together a file of all of your financial accounts, the bills you pay, sources of income, etc., and all your online passwords and log-ins. Keep it up to date and tell your financial appointee where it is.
Don’t Wait
You can always revise your plans after you make them. It’s common to change your views on how you want to be cared for as your life changes and the lives of those around you change also. Changing your plan may involve drafting revisions to your estate documents but that’s a relatively simple endeavor. We see problems when people don’t make a plan and they discover too late that something has gone wrong. I recently met with a smart, independent, 85 year old woman who was overseeing $10 million in assets. She came to us to look over her investments. We took a holistic look at her financial situation and found multiple areas in need of change and oversight. She was focused on what she knew: the investments, and neglecting all the areas she didn’t understand, which is what most of us do. The disarray, that she was completely unaware of, will lead to problems for her and the people who stand to inherit from her. When people wait to get help, they typically wait too long and the consequence is that they end up with fewer options. Sometimes it’s after damage has already been done. Don’t wait – make a plan!
If you have more questions about creating a plan to ensure it provides you with the support you need to live the way you intend, contact our team of experts today.
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