How to Protect Ourselves from Ourselves

In a previous thread I gave a glimpsing look at what has caused me to ask myself this question. Read it if you wish, but bottom line is that Dad’s poor aging judgement caused a lot of problems and loss of hundreds of thousands of dollars that he did not need to lose: https://discussion.fool.com/where-did-they-walk-to-house-apartme… Having had to bail him out more than once leaves me not wanting to do the same to our kids, and pondering how I can protect myself from myself as I age?

I have already taken on nutrition, being active mentally and physically. Dad did much of that too, though not as early as I did in life and not to what he no doubt would have called extremes.

We have talked with our kids about finances, and though only in their mid-20’s have them as concerned bystanders on our accounts. Basically this means should Vanguard and others question our judgement, notice a concerning pattern of withdrawals, they can reach out to our sons and suggest they get in touch with us to see if all is OK. This is not to say they can then take over control, but a problem found earlier usually is a smaller problem to deal with.

We have our money in a revocable family trust that becomes irrevocable when one of us passes on, insuring that the survivor is taken care of and the boys inherit what is left over, an not some floosie/gigolo that tries to bamboozle us.

One reason why we are waiting for SS until 70/full retirement age, is to maximize the potential insurance for a fixed income portion of our retirement that we have little control over. Tougher, though not impossible, to sign away SS en masse than write a check.

Any other ideas?

IP,
not going to a CCRC

3 Likes

We have talked with our kids about finances, and though only in their mid-20’s have them as concerned bystanders on our accounts. Basically this means should Vanguard and others question our judgement, notice a concerning pattern of withdrawals, they can reach out to our sons and suggest they get in touch with us to see if all is OK. This is not to say they can then take over control, but a problem found earlier usually is a smaller problem to deal with.

Sounds like you are using the new Trusted Contact Person that was established about two years ago or so.

If you have not already, you might also consider a Springing POA (the bolded section implies that you don’t have such). If all is NOT OK with you, then absent such, there is like nothing your kids or Vanguard can do about your poor decisions without obtaining guardianship.

I’ve dealt with this situation often and it is not always apparent that a senior is suffering from diminished capacity. In one case recently, a client was defrauded twice to the tune of $70,000 before we were able to get the POA involved and by then it was too late. Note this senior (in her 80s) still works 40 hours a week and is of sound mind and body - but simply got scammed.

5 Likes

not going to a CCRC

That could be a mistake. Assuming you can afford it, of course.

1poormom lived by herself most of her life. Owned her home, and was proud of that fact given that she started as a divorced woman with two kids back in the 60s. I was aware she was word-finding, but didn’t realize the depths to which she had sunk until she fell. I found stuff that I had missed on casual visits to her home. She wasn’t eating properly, for example. She had stacks of mail that didn’t matter (i.e. junk mail) that obscured mail that actually mattered. While in the hospital, the staff quickly arranged a neuro consult, which I had not expected. The neurologist said she should never drive again, and she shouldn’t be living alone. I never got that from casual visits, and phone calls.

She didn’t know she needed help, and I didn’t either. Alas, she wasn’t well-off enough to get a CCRC like Maryanne’s or the Count’s. She is now in an AL facility that does have memory care also. I gave her the choice of which facility, but not whether she was going to move. I’m making decisions for her now.

So, in the end, you may have no choice. You can preemptively do as the Count did, or you can reach the point where the decision will be taken away from you. Of course, you may never need such a facility. You may be sharp as a tack until you keel over pushing 100 years old. Or not. You can’t really know; none of us can.

If you’re living in your own place, and having aides come in, you can still fire them (i.e. have the power to make bad decisions). You can still hurt yourself and be helpless until someone discovers you (e.g. the aforementioned aide). At that point, your kids will have to remove your power for self-determination (assuming you survive it). It may be kinder for your kids to be proactive and plan for the worst.

I totally hear you. A CCRC is basically apartments. There are free-standing “villas”, but mostly apartments. I hate apartments. But ultimately I may have no choice, just as my mom did not.

The only option I can think of would probably cost even more money, and that’s to have a live-in aide, 24/7. Though in a pique of dementia, you could still fire them. Not sure how to get around that detail.

1poorguy

6 Likes

If you have not already, you might also consider a Springing POA (the bolded section implies that you don’t have such). If all is NOT OK with you, then absent such, there is like nothing your kids or Vanguard can do about your poor decisions without obtaining guardianship.

Thanks. We may do so later on, but I am still in my 50’s and have no surgeries planned…Our trust is set up with Eldest as default trustee should we lose our minds, but yes, he would have to prove that and as I have seen, that can be super hard to do. Dad was in his late 70’s when his issues started, so I figure I have another 10 years at least, if not 20.

IP

https://www.law.cornell.edu/wex/springing_durable_power_of_a….

I’m not clear on how this differs from a normal PoA, especially if the subject is unwilling to admit incapacitance. You’d still have to go to court to prove they are incapacitated (unless in a hospital in a coma, but a normal PoA would cover that). What does this buy you?

We are looking to update our trust soon, and so a detail like that might be useful. Right now we have the trust, with PoA, and medical PoA, and Living Will, and Last Will.

1pg

1 Like

We may do so later on, but I am still in my 50’s and have no surgeries planned

That is utterly irrelevant. Life can happen to any of us at ANY time. Personally, I nearly lost my wife in her 30s and have had POA for her ever since. You are fooling yourself if you are waiting until some magical moment when you know it is time to set up such protections.

Besides, what do you gain by waiting?

13 Likes

What does this buy you?

It allows the principal to restrict the POA from access to their accounts until a qualifying event. It does not “spring” into action until that event - usually a medically defined incapacity but we also used them in the military for anytime we were deployed outside of the country - they would become effective just for that time period.

A Durable POA is inforce immediately and allows the agent to act at any time and without the consent of the principal.

You might grant a spouse to be your durable POA but only want your kid to have springing authority, for example.

1 Like

Hmm. I’ll have to review our PoAs. I think they are worded such that 1poorkid can step in if necessary. As I recall, there has to be agreement among doctors. It’s been a while since we set that up. Like I said, I want to review/update it relatively soon. For one thing, co-trustees are no longer necessary. When we set this up, 1poorkid was a minor, so we had a trusted adult that had to agree with her. She’s 25 now, so probably not an issue anymore.

The only option I can think of would probably cost even more money, and that’s to have a live-in aide, 24/7. Though in a pique of dementia, you could still fire them.

That’s what my mom did. We used an agency that matched up live-in aides to people. This was in Chicago area, and they all seemed to be Polish. Marta was ours (hers). Marta barely spoke English but managed. She got off every other weekend to see her husband. The agency put a temp in for those 2 days. Those never spoke English at all.

This lasted for over a year, then one day Mom fired Marta. Without telling us. We found out a week later when we went over for a visit.

That was it. Told our builder (our new house was under construction) to finish out part of the spare space for an apartment for her, and we moved her in with us. Put her house up for sale.

1 Like

One would have to consult a lawyer, but I suspect a contract could be written wherein the elderly person did not have the authority to fire the aide, nor bar them from the house. But that would likely necessitate some form of declaration of guardianship by someone (e.g. offspring), or declaration of incompetence.

I was lucky that 1poormom didn’t fight much. She (to this day) complains, but she’s stopped talking about moving into her own home. However, I was prepared to go to court if needed, and at least one family friend had volunteered to testify as to her erratic behavior (i.e. incompetence).

1poorguy

I’m not clear on how this differs from a normal PoA, especially if the subject is unwilling to admit incapacitance. You’d still have to go to court to prove they are incapacitated (unless in a hospital in a coma, but a normal PoA would cover that).

I finally got around to estate planning. In addition to preparing a “living” trust, the lawyer prepared a “Durable Springing Special Power of Attorney and Nomination of Conservator” document.

The POA takes affect only after the conservator/agent receives a written and signed opinion from a licensed physician that the principal (me) is no longer physically or mentally capable of managing the principal’s finances. It remains in affect until the principal is capable of resume managing the principal’s finances or until death and the “living” trust assumes control of the principal’s assets.

This type of “springing” POA may be unique to California. It only takes affect while the principal is incapable of managing his affairs. It is similar to the transfer of Presidential duties to the Vice President while the President is incapacitated.

No court is involved in the process.

3 Likes

That is utterly irrelevant. Life can happen to any of us at ANY time. Personally, I nearly lost my wife in her 30s and have had POA for her ever since. You are fooling yourself if you are waiting until some magical moment when you know it is time to set up such protections.

Besides, what do you gain by waiting?

Indeed, but there are two healthy, relatively young people here. Not just me. The likelihood of both of us going bonkers at the same time is negligible, and that is what we are talking about. If we get taken out by an accident, which is the higher likelihood, then the trust will kick in for our kids to take over. Eldest, followed by Youngest and SIL are all set up as POA, medical POA, and successor trustees should the need arise. Even our dog has been provided for and has a home to go to.

There’s only so much one should take on at a time, and I am simply not ready for more. YMMV, and no doubt that will make you the stronger person, but I have more than enough in my life without taking on this non-critical issue.

IP,
hoping you understand that you are not privy to all that is going on in my life, and that given that you really should reserve judgement

It allows the principal to restrict the POA from access to their accounts until a qualifying event.

Which is what we have with our trust and associated legal papers we did last year.

IP

The POA takes affect only after the conservator/agent receives a written and signed opinion from a licensed physician that the principal (me) is no longer physically or mentally capable of managing the principal’s finances. It remains in affect until the principal is capable of resume managing the principal’s finances or until death and the “living” trust assumes control of the principal’s assets.

This type of “springing” POA may be unique to California. It only takes affect while the principal is incapable of managing his affairs. It is similar to the transfer of Presidential duties to the Vice President while the President is incapacitated.

No court is involved in the process.

VA as well. This is how it was explained to us when we established our family trust. That said, it’s tough to get doctors to declare someone incompetent, which is no doubt as it should be.

IP

Thanks. We may do so later on, but I am still in my 50’s and have no surgeries planned…Our trust is set up with Eldest as default trustee should we lose our minds, but yes, he would have to prove that and as I have seen, that can be super hard to do. - IP


Yes, super hard to do but especially so if HIPAA laws prevent the doctors who know you are crazy to release that confidential medical information to your default trustee so he can seize control. I am by no means any sort of expert on this stuff but I have been researching lately as I actually have an appointment this Friday with an estate attorney to write my will.

Here is something I found on HIPAA that says it pretty well

What About HIPAA issues?

The Health Insurance Portability and Accountability Act (HIPAA) deals with privacy and with what information doctors and hospitals can release to people other than the patient.

To ensure your agent can get information about your incapacitation, sign a release or authorization form at the time you sign your springing POA. This form will allow your agent to obtain proof of your incapacity from your doctors. Your agent will have to show the doctors the POA document to confirm the agent is authorized to work on your behalf.

A good estate plan includes having a POA, whether durable or springing. If you have a springing POA, make sure your document clearly states how doctors will determine your possible incapacity.

Yes, super hard to do but especially so if HIPAA laws prevent the doctors who know you are crazy to release that confidential medical information to your default trustee so he can seize control.

I know for Dad, Sis got the courts to order one for cause. The results were released to the court, not to Sis. The court relayed it to Sis.

Even if it’s easily doable, it’s still bloody hard to do. This was our Dad, after all. We are talking last resort. You hope to never have to go through this.

IP

The likelihood of both of us going bonkers at the same time is negligible

If you have retirement or other individual accounts, and you go ‘bonkers’, then even you spouse is likely prohibited from access to those accounts absent a POA.

“If you have retirement or other individual accounts, and you go ‘bonkers’, then even you spouse is likely prohibited from access to those accounts absent a POA.”

If those accounts are accessible on-line, there’s no reason your spouse can’t access them assuming you share passwords with each other. My broker allows all the accounts to be linked to a single sign-in.

Converting a 401K to an IRA is probably harder but brokerages seem easy.

I suppose it’s not technically legal to distribute cash from a spouse’s account, but I don’t think it’s prevented.

I suppose it’s not technically legal to distribute cash from a spouse’s account, but I don’t think it’s prevented.

The correct phrase is - “It’s illegal.”

Ira

1 Like

I suppose it’s not technically legal to distribute cash from a spouse’s account, but I don’t think it’s prevented.

The correct phrase is - “It’s illegal.”

It’s only illegal if the spouse does not have permission. I have POA on all of DH’s accounts, and so that means that I can access them. Given that, wouldn’t it make sense for spouses to have POA on each other’s accounts such that they can legally get to all the assets? Isn’t that a reasonable approach and doesn’t necessarily require competency to have to be judged?

I have POA on my son’s accounts as well, so the POA doesn’t have to necessarily go to a spouse. Perhaps a child would be able to assist here.

2 Likes