There comes a tipping point when people who have been in control of their finances and investments all their lives start to wonder if they can continue to do so in retirement. I know this from the email flow from readers who are in this situation. The question they all ask is, “What options do I have to get help?” To get the answer, let’s check in with author Mark Seguin. Advocacy in an Aging Society: Building Teams for Seamless Transitions in Personal Care and Asset ManagementBelow is a Q&A I conducted recently via email.
Q: Mark, can you tell us what inspired you to write this piece? Advocacy for Aging?
A: It started with something close to home. My father-in-law was diligent in his estate planning and had not considered a scenario in which he would become ill or lose mental capacity. In the early stages of dementia, he undermined his well-thought-out plans by selling his assets at a deep discount, simplifying his estate and trying to retain control. Luckily, family members were able to step in in time and restructure my father-in-law’s estate to his original intent.
Q: As we get older, we hear from more and more of our readers that they’re worried about their ability to manage their finances and investments. What advice would you give to these people to start thinking about where and how they can get help?
A: They have every right to be concerned. I accept that I’m not as smart as I was 10 years ago. My kids, on the other hand, are in the prime of their lives and in some ways I think they’re more capable than they were before.
If you have a power of attorney for your finances, the person named in that document (the “agent” or nominee) will be your helper. Your agent should fully understand their role and you should speak to them early on so they can keep up with your financial situation.
Anyone who does not have a power of attorney for property should create one with the help of a lawyer or a notary. It is important to choose a lawyer/agent you can trust, one who has the necessary skills, interests, health and availability.
Q: I want to delegate financial management to an individual who has received Power of Attorney for Property Management. What is the best way to make this transition?
A: The migration should be done in stages, following these four steps:
1. Inform your attorney/agent about your financial situation.
2. Have an attorney monitor your financial activities and tweak the process as needed.
3. Gradually transfer control to your lawyers.
4. Completely outsource financial management.
Q: When is the right time to start this transition? It’s easy to say sooner is better, but many people are deeply involved in their day-to-day finances and are reluctant to give up control.
A: The answer is “sooner or later.” It may seem simple. I believe the transition should begin the day the power of attorney is signed. You don’t have to give up control, but you should begin the conversation and transfer of knowledge to gradually delegate certain responsibilities over the years. The ultimate goal is not to give up control, but to delegate active management of your operations, with the benefit of your guidance and wisdom.
Q: For children of older adults, what are some signs that a parent can no longer manage finances and that you need to step in?
A: Please pay particular attention to the following:
• amnesia
• Loss of ability to process information
• Loss of reasoning ability
• Decreased language skills
It’s generally too late for people to realize and accept the signs of deterioration. Harmful financial situations can be avoided with early involvement of children and open discussions between parents and children, but this is easier said than done.
Q: If I am an elderly person living alone with no family, can I give them power of attorney for property and health matters? Who can assume this duty on my behalf? And how much does it cost?
A: A reader wrote to me asking about this exact situation. She had no family and considered asking a friend, but realized the importance of asking someone younger. She was hesitant to use a fiduciary service, but after some urging, she researched and found the right service and advisor for her. The cost of these services consists of an upfront fee of about 0.25 to 2.5 percent of the value of her assets, plus annual fees of 0.1 to 0.5 percent.
Unfortunately, there does not appear to be a similar third-party option for personal care decision-making. As an alternative and first step, I encourage people to create an advance care plan and communicate it to friends, health care providers, and other members of their immediate community. These actions can help build a team of advocates and ultimately lead to the identification of a substitute decision-maker for personal care POA.
Q: If you’ve been investing on your own all your life, what are your thoughts on finding a financial advisor to manage your investment accounts? Is it almost too late to wait until so late in life to make this transition? And how can you go about finding someone you can trust?
A: As long as you are mentally capable and have people around you to help you, it is never too late to choose an advisor. Anyone investing on their own should eventually plan to hire a suitable financial advisor/planner or find someone who is able and interested in eventually taking over management of their financial plan and investment portfolio as their estate agent/representative.
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Rob’s Personal Finance Reading List
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A veteran investment blogger and asset manager shares why he remains bullish on the U.S. If you’re tired of scrolling through all the doom and gloom news about U.S. politics, this is the perspective for you.
Planning a trip? Talk to your kids
Here, we suggest involving your kids in planning and budgeting for your next family trip, with the goal of teaching them the mindset of getting the most out of whatever money you have.
Podcast Fans
Subscribe to Stress Test Apple Podcasts or Spotify.
Ask Rob
Reader comments: “I was an heir to my mother’s estate, and she had the foresight to name me as the beneficiary of a small insurance policy, so I could receive payment for my work without having to charge a fee.”
Have questions or comments? send me. Unfortunately, we can’t answer every question individually. Questions and answers have been edited for length and clarity.
Tools and Guides
For people struggling with debt, there are nonprofit credit counseling agencies. Consumer Proposals and BankruptcyAlso, Tax exemption.
In the social sphere
Social media: Reddit discussion Bad Manners Talk to multiple mortgage brokers.
clock: Why is CBC so popular? Big city condominiums They are being left vacant. The market is flooded with investors who are getting out of properties that don’t make financial sense at current mortgage rates.
Money Free Zone
To sum up the list of songs covered extensively: Pink Floyd’s I wish you were here It will definitely be included. However, Larkin Poe It exceeded my expectations. By the way, I saw the LP at a music festival in Ottawa a few years ago and the crowd went wild.
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