In "Six Key Planning Targets for Solo Baby Boomers' Deep Aging," I listed the following:
• Emotional support
• Residential decisions and transactions
• Investments and financial decisions
• Legal representation
• Money handling and bill paying
• Medication management
Deep aging is generally understood to be the period of aging when most people are not very mobile and need some assistance with their activities. It occurs at different ages for different people, but for those who live into their 90s and 100s, it is experienced somewhere in those decades of life. Since more and more of us can expect to see those years it is important, especially for those aging alone, to do some planning for that time.
So far in the “planning for deep aging” series we have tackled emotional support ("Six Key Planning Targets for Solo Baby Boomers' Deep Aging") and residential decision making ("Will Boomer Solo Agers Move To Senior Housing?"). Today I am going to expand on the need for a plan for financial management, investments, and legal representation.
Adam took over his eighty-nine-year-old mother’s finances after she had a debilitating stroke. Even before the stroke she had started to talk about giving up her driver’s license and was asking Adam to help her with household tasks on a more frequent basis. When the stroke occurred, she became unable to speak or write for four months. Adam recalls that having her legal power-of-attorney a “Godsend.” The POA allowed him to get his name added to all her accounts, manage her income, pay her bills, file her taxes, and wade through the mountain of medical bills and statements that arrived daily. He was also able to arrange for her in-home long-term care and to pay himself and his other siblings for out-of-pocket expenses that occurred in the first few days of her hospitalization. After his mother recovered most of her mobility and some of her speech, Adam continued to manage her finances, and his mother expressed relief and gratitude that she had someone to take over for her.
How would a solo ager manage in these circumstances? Would there be another relative or friend to rush in, make decisions, pay the bills and manage the accounts? Without a power-of-attorney, this would have been difficult even for Adam. Solo agers need to select a trusted relative or friend in advance to be ready to take on these kinds of responsibilities in the case of temporary or long-term incapacity.
Investments and financial Decisions
As time goes on, some older adults begin to feel they are gradually losing touch with the ever-changing realities of the outside world. Will that happen to you? No one knows. At eighty-five or ninety, a person’s mental faculties are often not all they once were. At that point, a capable and trustworthy relative, friend, or fiduciary can take over some or all of the financial decisions—maybe handling the investments and doing the income tax calculations—if the solo ager has had the foresight to plan ahead.
This kind of planning requires good communication with the relative or friend the solo ager wants to name. Sometimes the one selected is not interested in taking on that kind of responsibility. In that case it is often in the solo ager’s best interest to engage a licensed professional fiduciary, daily money manager, or private guardian to entrust with a power-of-attorney and specific instructions.
When you make an estate plan––one that includes a long-term care plan––it should include a durable power-of-attorney (DPOA) for financial matters and one for health care decisions. A DPOA allows the person you name to have legal proxy for all decisions in one or both of these domains, meaning their signature is treated as your own.
Solo agers often stumble in this area. What relative or friend should be selected? Sometimes the best choice is a professional, an outsider. This is not only a reasonable choice for solo agers; it is often the choice of older adults who are parents. Almost all parents love their children but they don’t always trust them to do the right thing during a crisis.