Handling Aging Aunt’s Finances

Back in 2022 and 2023, I wrote about finding that my then 95-year-old aunt had designated me her financial and medical power of attorney, executor of her estate, and trustee for her living trust, though she had not informed me of this.  My brother and I moved her into a nice assisted living facility near where she had been living, and later I sold the town home where she had lived for 42 years, as well as some property in Florida that my aunt co-owned with me, my brother, and three of our cousins.

Since then, I have arranged her finances to be mostly on cruise control.  While my aunt’s attorney had set up a trust for her, and the attorney had provided paperwork to move her savings into the trust, Aunt Ina Lou never followed up on that, so none of her money was covered by the trust.  To avoid probate in Virginia (which apparently is an onerous process), you can have no more than $50,000 outside the trust.

I therefore moved practically all of her savings, along with the proceeds of her home and property sales, into her trust.  Initially, this was all in a money market account and a checking account in the credit union she has been using for many years.  Her pension and social security are paid directly into the checking account, and the monthly assisted living fees are automatically drawn from this checking account.  I also left some funds in the money market account which I can transfer into checking if needed to cover her bills.

Given her age and mental and physical condition, I did not expect her to live much longer, so rather than investing her money in mutual funds, I opened an account in the trust’s name at treasurydirect.gov, and I invested the bulk of her savings in T-bills.  Since I am executor, I wanted to simplify and expedite the handling her estate as much as possible, while ensuring that I could access the funds reasonably quickly if needed.  Therefore, I invested most of the T-bill money in two similar size 13-week T-bills, which are offset by six weeks and set up to be automatically reinvested.   These two T-bills have 45% and 47% of her T-bill funds, and the remaining 8% is in a 4-week T-bill, also automatically reinvested.

The interest in the T-bills goes directly into the credit union checking account, from which I pay her bills.  If I need to move funds to her checking account (which has happened once), I will simply stop the reinvestment of the 4-week bill, move some of it into the checking account, and then reinvest the remainder in a smaller 4-week bill.  However, the T-bill interest, along with her pension and Social Security, is generally sufficient to handle her expenses.

The T-bills are currently yielding around 4% annually, which is slightly better than inflation, with close to zero risk.  Fortunately, T-bills keep paying despite the federal government shutdown, so the money is safe there.

I keep spreadsheets for my aunt’s checking and savings accounts.  In addition, I have another spreadsheet for tracking the T-bill interest.  In addition, as a tax geek, I have a spreadsheet I use to estimate her federal and state taxes, so I can pay the right amount in estimated taxes.

While practically all Aunt Ina Lou’s funds are in the trust, I kept one non-interest-bearing checking account outside the trust.  This account just has the minimum ($500) required to not incur fees.  It is just for depositing any checks that are made out to my aunt, because her credit union is in Maryland, while I am in North Carolina.

The current setup is pretty simple, and the spreadsheets I use are similar to the ones I use for my own finances, so I expect to be able to keep up with my aunt’s finances as long as she lives.  If she makes it past 110, I may have to make some changes, as I may not be as sharp as Mr. Quinn in my eighties.