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A number of events over the past few months have me thinking about aging, mortality, legacy, frailty, and – of course – financial planning. These events included attending funerals, preparing tax returns (ours and dozens of others), visiting old friends and distant family, minor traffic accidents, winter doldrums, and the recent discussions on HumbleDollar on the unique estate planning needs of childless retirees. Recent market volatility may have played a small role.
My wife and I have a lot of real-world experience caring for aging and infirm parents, both physically and financially. Those experiences have seared in my mind the importance of a well-planned, well-documented, and well-communicated estate plan. Jonathan’s articles over the past year have been a great example of this.
A recent experience has me thinking about a very tricky and personal question in retirement. I have a good friend, a former colleague and mentor, who is in his late 70s, single, and childless. He lives in his home of 30 plus years, with a first-floor master bedroom, and relatively easy entry. He has his estate in very good order, has a deposit on a CCRC near family, and has communicated this with his family. He hopes he will have the ability to make the choice to move when the time comes.
It’s one thing to have a good estate plan in place. But if we haven’t communicated that plan, or are unwilling to execute it, it’s of little use. I can’t count the number of stories I’ve heard of aging parents that are unwilling to explain their finances with their children, much less hand over control. Will we be willing to give up the literal keys to our independence – our cars? Has anyone thought about, or put criteria into place, to help make good decisions about your future? Have you communicated that to the important people in your life?
I took a pretty serious tumble about a year ago. The injuries were mostly bruises, scrapes, and cuts. I don’t think the fall caused any cognitive issues, at least not any more than the 2 pints of Guinness that preceded it. But it could have been much worse, and it reminds me that things can change in an instant. So, I ask my HD friends – how will you know when it’s time? More importantly, will you be willing to execute the plan?
We have/had POA for both health and finances for my mother and late father. Father we were probably pretty close to needing to exercise at least on finances before his death enabled me to sort things through his estate. Mum still fine though I manage most of her online stuff but it is really hard to move her away from excessive holding of underproductive cash. She hates dealing with financial stuff so the response is just the path of least resistance.
I doubt she’ll resist when we do need to exercise POA but it will legally block her ability to gift freely.
It sounds like you are well prepared. What I was trying to get at is how will we know when it is time to get help. It sounds like your Mom is fairly typical of her generation. We were lucky that both my mom and mother-in-law were willing to hand over the reins before it became an emergency. My wife’s Aunt was close, but we worked hard to get her finances straightened out.
We likely won’t know the precise time. What we do need to do is get the trusted people inside the tent in advance and order things as easily as we can for them. Which can be hard – people we love dearly and trust implicitly may simply have no interest in financial bootcamps or have too much stuff going on themselves to carve out the time.
And human nature says we wish to avoid becoming a burden as long as possible so we probably don’t give things up as early as we should. I’m hoping I live long enough to get one of my nieces involved in understanding finances for my own interests as well as theirs.
And some of it is doing the work on ourselves. Perhaps writing instructions to our future selves or a short video that can be played back to us to remind us that we consented and made this plan ourselves. To both hold our less mentally agile selves to account and to reassure. I’m thinking stuff like when I have my second unprovoked fall or when I can’t name 12 things beginning with a letter (I’m not picking X or Z).
This is indeed a timely article for us. Having recently joined the octogenarian club, my wife and I are converting a standard will to a Living Trust. As with the initial creation of our will, we are actively including our 2 adult children in the drafting process and discuss in detail what the provisions mean and how they are to be implemented. We are blessed with two responsible, common sense children and include them in nearly every aspect of our estate planning and financial decision making process.
One of the best things that our daughter made us do was adoption of an online password manager about 10 years ago to help us manage all the internet login names and passwords that we use. That system now includes common items like bank accounts, but also a host of other personal data critical to our affairs. I can̵