Angela Alvig, CPA

Make a Plan for Aging, The Way You Want To

Published April 20205 minute readInsights from Brent Scheetz

This topic has always been important, but current events have all of us thinking more about our health, and we also have all heard stories about families who thought they had a plan, and as things have shut down, it may not have worked out so well, or as planned.

The reality is, we only get to age once. And as we age, it should bring peace of mind to live out the plan we have in place, with some measure of assurance and enjoy the fruit of our labor. Far too many people enter retirement uncertain what a plan for aging looks like. The good news is we have been preparing for this our whole lives…and everything we need to do it right is out there. We just need to be intentional about getting it – know what you want, make a plan, and execute on it.

What do we need?

The first part of aging well is having a plan. Just so we’re clear, it’s not really a plan if it only exists in our head. It needs to be written down, in the right format (especially if it’s a legal document) and shared with the right people.

Everyone needs a Will, Durable Power of Attorney and Healthcare Directive. These are basic documents that indicate where you want your assets to go when you pass away (your Will) and a financial and medical back up plan in case you are unable to act or speak for yourself (your Power of Attorney and your Health Care directive, respectively).

Having a Will is a no-brainer for most people, but the other documents are as or almost more important. It’s important to and name someone who would act on our behalf, if something happens during your life, that causes you to lose mental capacity to act for yourself. In most cases, at a minimum, the Financial POA will need to be used at some point in your life. I’m guessing your Attorney-in-Fact (person named in your Power of Attorney) will at least need to sign a check or your tax return for you at some point!

In addition to these documents, some people do need a Trust. Who needs to think about forming a Trust? Good question. A Trust lets you control your assets “from the grave”. Does this apply to you? A typical situation might be:

Providing for a special needs loved one in order to keep the assets from interfering with other benefits, Ensuring that your children are not disinherited in a second marriage situation, or Structuring lifetime payments to a beneficiary that has shown they don’t make wise financial decisions. Administering assets located in multiple states, particularly states like California or Florida where probate through the courts can be difficult and costly Where do I start?

Start by talking about your plan with someone. Talking about it creates accountability and helps it come to life. You might speak with your family members, financial advisor, CPA, or other trusted person who can help you implement your wishes and check in with you on whether your plan is moving forward.

Keep in mind that every plan should be customized. Your life feels “normal” to you, but it is entirely unique, and your plan will be too. Your plan needs to account for this uniqueness. Do your documents allow your Attorney-in-Fact to make transactions on your financial accounts? Probably. What if the account is an IRA? Maybe. What if it’s a self-trusteed Revocable Trust? Not sure. All of these questions should be answered now, to ensure no gaps, if something happens to you.

But that’s only half of the equation. Your financial institution may have additional documents for you to sign in order to allow your Attorney-in-Fact to act as well. Again, your plan is unique, and it also needs to be complete.

Beyond legal documents, maintaining records of current financial accounts and other assets is just as important. Your alternate decision makers need to know what you have and where to find it.

Additionally, what will you call home as you age? Do you want to age in place at home or start adjusting to a continuing care community as soon as possible? Go about this as a two-step process. It isn’t enough to just make a decision. Communicate your decision to those that will be involved in your plan as you age, and take steps to begin implementing this plan.

Who do we need? What team should we have in place?

Just as important as having the right documents, is having the right people. There has never been a better time to age. There are services and resources available for just about every possible issue we may encounter; housing locators, move managers, concierge drivers, care coordinators, insurance agents, etc. All customized to the issues we face as we age.

Just like your documents are customized to you, your team will be too. Not everyone will need every resource available. Some resources will be lifelong relationships and others will be temporary for a season. The key is accessing the service when you need it (and in some cases even before). Unfortunately, when it comes to aging, it can be especially challenging to implement a new service at the right time, due to health issues or cognitive decline. Deciding after a serious hospitalization to add your Power of Attorney to your checking account, investigate that long-term care policy or downsize to a retirement facility may mean that your plan never comes to fruition. You don’t want to start too late.

One of the secrets to aging well is having a quarterback that is capable and responsible for keeping up on vital matters and implementing the resources in the community at the appropriate time. It’s like building a house. It doesn’t matter if you buy all the right materials if you’re not able to make use of them when the time calls for it. You need a General Contractor to work with other specialized professionals that can follow your plan, keep things on track and make the right adjustment with your input.

As a Client Manager at Simplify Wealth, I am thrilled to serve as a trusted advisor and quarterback to provide solutions to client issues that arise as they age. If you have any questions or need help getting started (or know someone else who does), please don’t hesitate to reach out by email at Wishing you all the best success as we seek to age well together!