Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

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TheGreyingDuke
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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by TheGreyingDuke » Tue Nov 07, 2017 7:28 am

Doc wrote:
Mon Nov 06, 2017 3:07 pm
nisiprius wrote:
Mon Nov 06, 2017 2:34 pm
Artsdoctor wrote:
Mon Nov 06, 2017 2:16 pm
nisiprius wrote:
Mon Nov 06, 2017 6:56 am
Pssst. "Apple, table, penny." How many people know what I am talking about?

Zen question: is it really cheating to know the answer to a memory test by heart?
You're not really supposed to remember the three items after you leave the office. And you're not supposed to teach everyone the only three things they have to remember during a mental status exam! I'll have to come up with another three . . .
I didn't try to learn them, but it's the same every year... and (astonishingly, and I don't know why) the same across providers. After a few times my wife and I compared notes, and the surprise of finding that it was the same helped make it even more memorable.

I've tried not to learn D E F P O T E C, either, but how many times can you read it aloud before it starts to sink in?
All right. My PCP has a different approach. Last year he had a resident do the initial workup. She had name from a south central Asia country that was a gazillion letters long. My question was "what was her name". (It was written on her lab coat.) I failed but we all had a good laugh.

(He did follow up with something more reasonable.)
During his latter years I accompanied my father, a man of definite political ideas, to a doctor appointment. When the question came "Who is the president of the US", an incumbent my father was not enamored of, he answered "Don't remind me of that SOB" and when pressed by the doc he responded "Herbert Hoover". I think he got a passing grade on that.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by columbia » Tue Nov 07, 2017 7:41 am

The Vanguard Balanced Index is probably the best choice for those wanting one fund, IMO.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Blueskies123 » Tue Nov 07, 2017 7:46 am

While I am only 63 I wanted to greatly simplify things (and reduce risk) in case of stroke, heart attack or other worst case scenarios. My spouse takes little interest in finances. I went from 20 or so positions at 3 fund companies to about 7 all at fidelity and one high yield savings bank.
FIRE July 2015 The US government spends nearly the ENTIRETY of its tax revenue on Social Security, Medicare, and Interest on the Debt.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Lexi » Tue Nov 07, 2017 8:27 am

snarlyjack wrote:
Mon Nov 06, 2017 6:13 am
T :moneybag

We muddled our way through it. I did have her power of attorney.
So I was able to use it for banking & medical issues. Her funeral
cost $15,000 (plot, casket, funeral, etc). Then after the funeral I
had to take the power of attorney with the death certificate to transfer
the car & house titles. I learned a lot.

...

The bottom line is : You need a power of attorney, someone you
really trust (a child) and money. Then simplify everything to
the 9th degree. You also need a will!
The power of attorney ceases to exist at the moment the person who issued it dies. To transfer titles after death you need to be the executor. Since it worked, i would assume that is what you used.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by DarthSage » Tue Nov 07, 2017 9:42 am

We're dealing with this right now. My MIL died over the summer, at age 86. There were some minor signs of cognitive decline--nothing serious, just enough to make us concerned. In her case, I think the big issue was, she thought she had a lot of time left. If you had asked me in June, I would have said that I supposed she had a few good years left, but a serious fall led to complications that killed her.

So here we are--DH and his brother are executors. I'm sure MIL would have told you that she was very on top of things, and left the breadcrumbs very close together. The reality has been somewhat different. She WAS organized, and by and large, most accounts/important papers were found very quickly. However, some of the issues DH/BIL encountered (so far) have been:

Estate attorney was excellent, but not licensed to practice in the state MIL died in.
No fewer than 7 IRAs, with three different firms, and 2017 RMDs not taken. 2 of these IRA accounts were just located a few weeks ago.
A trust set up to benefit the grandchildren was set up weird. Luckily, DH/BIL were in agreement and are handling the proceeds in the spirit that was intended.
Paperwork, paperwork, paperwork. Certainly, this isn't MIL's fault. But I'm on a first-name basis with the post office lady. Many documents have to be notarized/signature guaranteed.

And, of course, on top of all this, we're dealing with the emotional aspects of losing a family member. Dh and I have agreed that, once we're through the forest, we're going to work on getting our own finances in order. Hopefully, we can make things easier for our own children.

Full disclosure: I'm 53, DH is 55.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by CULater » Tue Nov 07, 2017 10:59 am

I have an IRA with a TIPS ladder with maturities from 2023 to 2029. It's been a worry to me because I have to take RMDs from it, which forces me to liquidate some of the bonds each year until 2023 to do that. This thread has inspired me to just liquidate all the TIPS and transfer the proceeds to my TIAA Traditional 403(b) account and get rid of the IRA altogether.
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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by hoppy08520 » Tue Nov 07, 2017 11:48 am

columbia wrote:
Tue Nov 07, 2017 7:41 am
The Vanguard Balanced Index is probably the best choice for those wanting one fund, IMO.
Personally, if you're looking for a 60/40 stock/bond fund, then I'd prefer a more diverse fund like the LifeStrategy Moderate Growth Fund than the Balanced Index Fund. I wouldn't want to leave out international investing entirely.

Balanced Index Fund:
  • 60% CRSP US Total Market Index - a total stock market index
  • 40% Bloomberg Barclays U.S. Aggregate Float Adjusted Index - a total bond index
LifeStrategy Moderate Growth Fund (VSMGX)
  • 36% Vanguard Total Stock Market Index Fund
  • 24% Vanguard Total International Stock Index Fund
  • 28% Vanguard Total Bond Market II Index Fund
  • 12% Vanguard Total International Bond Index Fund

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nedsaid
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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by nedsaid » Tue Nov 07, 2017 12:21 pm

nisiprius wrote:
Mon Nov 06, 2017 2:34 pm
Artsdoctor wrote:
Mon Nov 06, 2017 2:16 pm
nisiprius wrote:
Mon Nov 06, 2017 6:56 am
Pssst. "Apple, table, penny." How many people know what I am talking about?

Zen question: is it really cheating to know the answer to a memory test by heart?
You're not really supposed to remember the three items after you leave the office. And you're not supposed to teach everyone the only three things they have to remember during a mental status exam! I'll have to come up with another three . . .
I didn't try to learn them, but it's the same every year... and (astonishingly, and I don't know why) the same across providers. After a few times my wife and I compared notes, and the surprise of finding that it was the same helped make it even more memorable.

I've tried not to learn D E F P O T E C, either, but how many times can you read it aloud before it starts to sink in?
So are you trying to say that you cheated on a dementia test? Sort of like memorizing the eye chart. I guess if you are cagey enough to cheat, you probably don't have dementia. If you had diminished mental capacity, it wouldn't occur to you to cheat.
A fool and his money are good for business.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Teague » Tue Nov 07, 2017 12:42 pm

If I'm ever given the "apple, table, penny" test think I'll rattle off the names of three cranial nerves. And ask the doc to name the other nine.

That should knock 'em for a loop. :happy
Semper Augustus

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by snarlyjack » Tue Nov 07, 2017 1:38 pm

Lexi,

You are correct.

In my case it was just my Mom & me. I was the Executor
of her will and her only beneficiary. I had her power of attorney.
With her IRA I needed a "Medallion Signature Power of attorney" which
was a hassle. I didn't even know what a medallion signature power of attorney was.
(It's a Special Notary needed for some IRA's & Brokerage Accounts and only
some notaries are Special Medallion Signature Notary's).

This whole process was a hugh learning process for me. Not only did I
have to take care of my Mom. Then plan the funeral while grieving.
Then being the executor administer her estate (transfer car & house titles)
then deal with Life Insurance. Then figure out what to do with the Life
Insurance money (which I' am still messing with, 3 years later). It all lead
me to the Bogleheads which have provided excellent support & advice.
I 'am 100% in support of the Bogleheads...

One other thing I've found out. We live in the gray. On some of this financial
stuff their is no 100% right or wrong answer. Some of it comes down to feeling
& needs. Their are also tax considerations, placement considerations and
your knowledge considerations. Their have been times when I was pulling my
hair out...while still having to mow & water the lawn.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Nowizard » Tue Nov 07, 2017 1:42 pm

Excellent comments. I would also add that simplification should be considered when a person is cognitively intact but in compromised physical health, particularly if married or with a SO who is uninterested in investing.

Tim

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by LadyGeek » Tue Nov 07, 2017 4:30 pm

I removed an earlier post which suggested medical advice (preventing and reversing cognitive decline). As a reminder, see: Medical Issues
Questions on medical issues are beyond the scope of the forum. If you are looking for medical information online, I suggest you start with the Medical Library Association's User's Guide to Finding and Evaluating Health Information on the Web which, in addition to providing guidance on evaluating health information, includes a list of their top recommended sites.
This thread is now in the Personal Finance (Not Investing) forum (personal finance).
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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Fallible » Tue Nov 07, 2017 5:20 pm

nedsaid wrote:
Tue Nov 07, 2017 12:21 pm
nisiprius wrote:
Mon Nov 06, 2017 2:34 pm
Artsdoctor wrote:
Mon Nov 06, 2017 2:16 pm
nisiprius wrote:
Mon Nov 06, 2017 6:56 am
Pssst. "Apple, table, penny." How many people know what I am talking about?

Zen question: is it really cheating to know the answer to a memory test by heart?
You're not really supposed to remember the three items after you leave the office. And you're not supposed to teach everyone the only three things they have to remember during a mental status exam! I'll have to come up with another three . . .
I didn't try to learn them, but it's the same every year... and (astonishingly, and I don't know why) the same across providers. After a few times my wife and I compared notes, and the surprise of finding that it was the same helped make it even more memorable.

I've tried not to learn D E F P O T E C, either, but how many times can you read it aloud before it starts to sink in?
So are you trying to say that you cheated on a dementia test? Sort of like memorizing the eye chart. I guess if you are cagey enough to cheat, you probably don't have dementia. If you had diminished mental capacity, it wouldn't occur to you to cheat.


Some people diagnosed in early stages of Alzheimer's or other types of dementia have written books and articles and given presentations about their bouts with the disease. And some have been clever at hiding it - until they run into medical experts aware of this and who know how to deal with it when testing and diagnosing.
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by celia » Tue Nov 07, 2017 5:24 pm

Sheepdog wrote:
Mon Nov 06, 2017 12:38 pm
nisiprius wrote:
Mon Nov 06, 2017 6:51 am
...-and that state treasurers are going to get a windfall in about ten years as people who have "gone electronic" on their statements start to die off.
I agree that state treasuries and maybe even the US Treasury and insurance companies will be getting free unclaimed dough.
I hope you realize that state treasuries don't OWN the funds that are turned over to them as unclaimed property. They hold them (and often pay interest) until someone proves they are entitled to them. We had a Boglehead several years back who found unclaimed property for an ancestor who died 50? years previously. No other descendants were interested in doing the work to claim the money or considered it "not theirs", but he was willing to do the genealogy (and enjoyed it although it took time) and probably got everyone else to sign off on it, so he could claim it.

As far as insurance companies holding money for life insurance, they are now required to scan the SSN database for their policy holders and find those who died. They then need to send a letter to the last known address (or the beneficiary?) telling them how to file a claim. We also had a Boglehead post about how his mom got such a letter after his dad had died. He assumed it was a scam, but we suggested he look into it even though neither he nor his mom had ever heard of the insurance company. They were pleasantly surprised to receive the money. (I am familiar with this as I once heard the California state treasurer speak at a meeting for non-profit leaders. He told how the courts had just mandated the money be given to beneficiaries. He and other state treasurers grouped together to sue some of the insurance companies to make this happen. I believe all of this now works as it is supposed to.)

As far as the US Treasury, I don't know their procedures, but the IRS does know when someone has died and if a tax return has been filed or not.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by celia » Tue Nov 07, 2017 5:33 pm

Another option is to do what my in-laws did a few years before they turned 90, but were still "sharp as a tack". They had the successor trustee become a third co-trustee while they were still living and notified the other children. I think they just got tired of paying all their bills and balancing the checking account. They maintained control over their investments, but bill-paying was delegated early so the trustee could gain some experience while they were around to answer questions. Then as health problems became serious, there was no need to have to transition to a power-of-attorney or secondary trustee. No doctor tests or legal filings were needed since they voluntarily transitioned control early.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by BigJohn » Wed Nov 08, 2017 9:01 am

Retired about 3 years ago and have been focused on simplification for about the last 5 years with a bit more left to do. Some things I did consistent with this great line from nisiprius..
nisiprius wrote:
Mon Nov 06, 2017 11:27 am
Simplification, no more and no less. Simplification at the expense of optimization, and at the expense of ego.
1) All bills on autopay from checking account. ER in banks savings account linked to checking account with automatic overdraft.
2) Reduced number of financial companies I have to deal with from 4 - 5 to two. Bank for checking/savings, VG for investments.
3) Within VG, simplified account structure and going to 3/4 fund portfolio over time (driven my not wanting to incur large cap gains).
4) Updated Will, DPOA, Health Care POA and Advanced Directives documents with significant input/involvement from my 3 adult children.
5) Prepared and keep up-to-date a file with details on accounts, insurance, etc (sometimes called a death book, viewtopic.php?p=1743671#p1743671)
Sheepdog wrote:
Mon Nov 06, 2017 12:38 pm
I agree with everything you wrote, but I wanted to single this statement. I will accept only paper statements and bills. Paper offers a trail after I have passed. My heirs would not see the electronic statements. My wife hates computers and smart phones. "Human touch is missing with those things." she says. Paper files will be extremely valuable.
I do disagree with nisi and sheepdog on this one by doing the following. When I receive email notification about statement availability, I logon and download a copy to my computer. I have a very straight forward system all in a single folder for just financial statements by account by month/year so my children can easily find any statement I've been sent in the last 8+ years. Just my opinion but I think this is better for them than having to go through a lot of paper files.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Da5id » Wed Nov 08, 2017 9:13 am

tadamsmar wrote:
Mon Nov 06, 2017 5:46 pm
I don't understand this reverence for the 3 fund portfolio.

When my almost 90 year old MIL realized that her investment advisor was lying to her about her annuity to fund his boat, I took over and arranged to put her in the Vanguard Target Retirement Fund Income. It was a no brainer. I set up Agent Authorization for myself and my wife so either of us could manage her income stream.

This was a simple, good plan.
I don't think there is universal "reverence" for the 3 fund portfolio. It is a good plan for many (most?) people, including me currently. But not for everyone. If you are in mental decline or have other reasons that make 3 fund a poor fit, the needs to rebalance etc may well be too much, and behavioral errors may get worse. A single balanced fund (LifeStrategy, Target Retirement, Wellesley, whatever) is likely the way to go then.

I'd also throw in the towel on I-bonds if/when I start having mental decline. The web site is not so easy, and it is one more thing to keep track of. A bank account and a balanced fund may well be plenty.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by nisiprius » Wed Nov 08, 2017 9:22 am

BigJohn wrote:
Wed Nov 08, 2017 9:01 am
I do disagree with nisi and sheepdog on this one by doing the following. When I receive email notification about statement availability, I logon and download a copy to my computer. I have a very straight forward system all in a single folder for just financial statements by account by month/year so my children can easily find any statement I've been sent in the last 8+ years. Just my opinion but I think this is better for them than having to go through a lot of paper files.
Do you ever test the system? Next time you have a chance, ask one of your children to turn your cmputer on and answer a question about your accounts. I'm not saying they won't be able to do it, I'm saying you need to periodically test the system. The other day I asked my wife to log into her Treasury Direct account and even though she set it up only three years ago, it was amazing how many problems and hurdles there were, one being that she had changed email providers and didn't have easy access to the email address to which the one-time code was sent, thus couldn't log in to update her email address, and couldn't remember the answers to the security questions that were supposed to be the fallback. She will have to call customer service.
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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by BigJohn » Wed Nov 08, 2017 6:00 pm

Nisi, can't say I've tested it but instructions to access are in my death book. No different than making sure you're kids know where the paper statements are in my mind, maybe even easier for them because they are used to paperless.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by tadamsmar » Wed Nov 08, 2017 6:16 pm

BigJohn wrote:
Wed Nov 08, 2017 9:01 am
5) Prepared and keep up-to-date a file with details on accounts, insurance, etc (sometimes called a death book, viewtopic.php?p=1743671#p1743671)
That death book is appropriately named because it puts to death your reimbursement guarantees for all your mutual funds and stocks since it calls for sharing your passwords. Also, it is full of unnecessary details and you will have to waste your time keeping them up to date. No one has any valid use for your brokerage passwords after your death. I have set up Agent Authorization for my wife, but that should not be used after my death. People should make some attempt to learn the proper procedures.

My "death book" fits on a single page. It's mostly just a list of firm names and locations of my my assets and insurance.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by BigJohn » Wed Nov 08, 2017 6:36 pm

tadamsar, I agree and probably should have modified my comment to say those are things to consider. I've modified mine to only make sure my children know where accounts are and how to access records they might need much like what you describe. At one point it contained details on untaken company pension and life insurance as well. Although called a death book in the post, I think you need to consider contingencies for if you are just unable to manage the money and someone has to take over while you are still alive.

No one has agent authorization on my accounts right now but one question for you. How do you make sure your wife will remember the account name/password if needed while you are still alive?

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Sandtrap » Wed Nov 08, 2017 7:10 pm

Nowizard wrote:
Tue Nov 07, 2017 1:42 pm
Excellent comments. I would also add that simplification should be considered when a person is cognitively intact but in compromised physical health, particularly if married or with a SO who is uninterested in investing.

Tim
I really really like that one.
Cognitively intact but physically compromised.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Sandtrap » Wed Nov 08, 2017 7:14 pm

nisiprius wrote:
Wed Nov 08, 2017 9:22 am
Do you ever test the system?
Next time you have a chance, ask one of your children to turn your cmputer on and answer a question about your accounts. I'm not saying they won't be able to do it, I'm saying you need to periodically test the system. The other day I asked my wife to log into her Treasury Direct account and even though she set it up only three years ago, it was amazing how many problems and hurdles there were, one being that she had changed email providers and didn't have easy access to the email address to which the one-time code was sent, thus couldn't log in to update her email address, and couldn't remember the answers to the security questions that were supposed to be the fallback. She will have to call customer service.
Sometimes, not by choice, the "system" gets tested.
A 911 call, ambulance ride, and a night in the ER, is a nasty "wake up call" to see if one's affairs are in order.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Sandtrap » Wed Nov 08, 2017 7:17 pm

celia wrote:
Tue Nov 07, 2017 5:33 pm
Another option is to do what my in-laws did a few years before they turned 90, but were still "sharp as a tack". They had the successor trustee become a third co-trustee while they were still living and notified the other children. I think they just got tired of paying all their bills and balancing the checking account. They maintained control over their investments, but bill-paying was delegated early so the trustee could gain some experience while they were around to answer questions. Then as health problems became serious, there was no need to have to transition to a power-of-attorney or secondary trustee. No doctor tests or legal filings were needed since they voluntarily transitioned control early.
'
This is an outstanding idea, "celia". . .as always.
My son is my successor trustee and I've been bringing him on-board bit by bit in all trust matters. Many wait until it is too late and the successor trustee is overwhelmed and often incapable.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by tadamsmar » Wed Nov 08, 2017 8:04 pm

BigJohn wrote:
Wed Nov 08, 2017 6:36 pm
tadamsar, I agree and probably should have modified my comment to say those are things to consider. I've modified mine to only make sure my children know where accounts are and how to access records they might need much like what you describe. At one point it contained details on untaken company pension and life insurance as well. Although called a death book in the post, I think you need to consider contingencies for if you are just unable to manage the money and someone has to take over while you are still alive.

No one has agent authorization on my accounts right now but one question for you. How do you make sure your wife will remember the account name/password if needed while you are still alive?
To use Agent Authorization, she only needs her own account name and password. If she forgets her login credentials then I am not sure what happens. There is a Vanguard office not too far away, she could drive there or one of the (adult) kids could drive her there. Also, if she is incompacitated, there is a contingent POA (not me). Something could be worked out.

The biggest problem with Agent Authorization that Agent Authorization does not authorize everything needed for the non-financial aspects of account maintenance. She is my POA, that can be used but I understand that it is relatively hard.

Thanks for asking, I should inform her about the physical Vanguard office that is relatively near.
Last edited by tadamsmar on Thu Nov 09, 2017 7:54 am, edited 1 time in total.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by RetiredWithDementia » Wed Nov 08, 2017 8:43 pm

As my name means, I am 67 retired and have Dementia with Lewy Bodies. It sucks. I now sitting in my room at my new home in CCRC, but I did take great moves to get my finances in order so my wife would be able to manage things, which she had never done with finances before. All legal paperwork done. Can not go into great detail right now, but all funds in one of 4 vanguard funds. 500, total stock, intermediate bond and total bond. All spread between tax account and ira. about 55/45 stock to bond. I am lucky because we have more money that my wife and me will ever need, even though my costs will be huge. She might end up with huge costs too if she has bad luck too. I never thought this might happen to me, but here I sit. With Lewy Body thing I know, understand and realize what I am going through and what is to come. That part of me stays until close to the end. Lots of other problems now, and more to come. I hope my wife can do things. She has backups if she wants to call on them, but no paid people. we are gifting to our son and his family, and will contiue to do so. I suggest that everyone assume the worse as you get older, because it just might happen. Good luck.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Taylor Larimore » Wed Nov 08, 2017 9:37 pm

RetiredWithDementia:

Thank you for your courageous message. It will help other Bogleheads who someday may be faced with the same disease.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Artsdoctor » Wed Nov 08, 2017 11:20 pm

RetiredWithDementia wrote:
Wed Nov 08, 2017 8:43 pm
As my name means, I am 67 retired and have Dementia with Lewy Bodies. It sucks. I now sitting in my room at my new home in CCRC, but I did take great moves to get my finances in order so my wife would be able to manage things, which she had never done with finances before. All legal paperwork done. Can not go into great detail right now, but all funds in one of 4 vanguard funds. 500, total stock, intermediate bond and total bond. All spread between tax account and ira. about 55/45 stock to bond. I am lucky because we have more money that my wife and me will ever need, even though my costs will be huge. She might end up with huge costs too if she has bad luck too. I never thought this might happen to me, but here I sit. With Lewy Body thing I know, understand and realize what I am going through and what is to come. That part of me stays until close to the end. Lots of other problems now, and more to come. I hope my wife can do things. She has backups if she wants to call on them, but no paid people. we are gifting to our son and his family, and will contiue to do so. I suggest that everyone assume the worse as you get older, because it just might happen. Good luck.
Thank you, RWD, for your very helpful message. Wishing you and your wife the best.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Sandtrap » Wed Nov 08, 2017 11:32 pm

RetiredWithDementia wrote:
Wed Nov 08, 2017 8:43 pm
. . . . . . I suggest that everyone assume the worse as you get older, because it just might happen. Good luck.
Thank you so much for sharing.
Life lessons taken to heart.
Healing affirmations sent your way.
j :D

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by randomguy » Wed Nov 08, 2017 11:42 pm

Da5id wrote:
Wed Nov 08, 2017 9:13 am
tadamsmar wrote:
Mon Nov 06, 2017 5:46 pm
I don't understand this reverence for the 3 fund portfolio.

When my almost 90 year old MIL realized that her investment advisor was lying to her about her annuity to fund his boat, I took over and arranged to put her in the Vanguard Target Retirement Fund Income. It was a no brainer. I set up Agent Authorization for myself and my wife so either of us could manage her income stream.

This was a simple, good plan.
I don't think there is universal "reverence" for the 3 fund portfolio. It is a good plan for many (most?) people, including me currently. But not for everyone. If you are in mental decline or have other reasons that make 3 fund a poor fit, the needs to rebalance etc may well be too much, and behavioral errors may get worse. A single balanced fund (LifeStrategy, Target Retirement, Wellesley, whatever) is likely the way to go then.

I'd also throw in the towel on I-bonds if/when I start having mental decline. The web site is not so easy, and it is one more thing to keep track of. A bank account and a balanced fund may well be plenty.

Rebalancing is over rated:) Realistically the complexity of this situation isn't going to be in portfolio allocation. That is a really minor problem compared to things like finding a responsible person to pay the bills and release the money. You can google at how many kids have scammed their parents to see what this risk is like.

The real simplification financially is to have all the oney in 1 or 2 accounts so you only have to deal with a couple companies rather than a half dozen (imagine someone with a bank account, Treasury direct, a IRAs at 2 different companies, 3 401(k)s, taxable accounts...). You might need to make the same phone call a dozen times to sort things out.:)

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Watty » Thu Nov 09, 2017 12:36 am

pkcrafter wrote:
Mon Nov 06, 2017 11:39 am
Well, this discussion certainly sets my mood for the day.
Where I live it cost between $6,000 - $7,000. per month for assisted living.
This is a big problem, what are Bogleheads doing about it?

Paul
My Mom survived my Dad and she always said that her paid off house was her long term care policy. She always told us "in no uncertain terms"(as only a mother can :D ) that if she ever needed to move to a nursing home we were to sell her house and put her in the best place possible. She also made sure that we had the paperwork to sell her house.

When someone goes into assisted living many of their other expenses stop if they don't have a surviving spouse.

The extra long term care costs are only what is above their normal costs. If your normal retirement budget was $5,000 a month and you end up at long term care which costs $6,000 - $7,000 then the gap could just be a couple of thousand dollars a month.

She never needed long term care but her math was sound since her home equity in addition to her normal retirement budget would have been enough to pay for assisted living for at least ten and maybe twenty years. The house was not a terribly expensive house in a medium to low cost of living city in the mid-west.

That does not work as well if you have a spouse that is still living but the home equity can still be a safety net.

Delaying starting Social Security until you are 70 to get a larger benefit amount will also help pay for assisted living if you need it.

That is far from being foolproof since things can happen like a couple where a spouse needs LTC fairly young, or if you live to be 105 but you sometimes can't avoid all risks.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by BigJohn » Thu Nov 09, 2017 8:20 am

randomguy wrote:
Wed Nov 08, 2017 11:42 pm
The real simplification financially is to have all the oney in 1 or 2 accounts so you only have to deal with a couple companies rather than a half dozen (imagine someone with a bank account, Treasury direct, a IRAs at 2 different companies, 3 401(k)s, taxable accounts...). You might need to make the same phone call a dozen times to sort things out.
Amen! :beer

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Taylor Larimore » Thu Nov 09, 2017 9:24 am

Bogleheads:

Since my wife died four years ago, I have one mutual fund company, one bank account and one credit card.

I love the simplicity, my caregivers will love the simplicity and my heirs will love the simplicity.

:beer

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by pkcrafter » Thu Nov 09, 2017 10:50 am

Watty wrote:
Thu Nov 09, 2017 12:36 am
pkcrafter wrote:
Mon Nov 06, 2017 11:39 am
Well, this discussion certainly sets my mood for the day.
Where I live it cost between $6,000 - $7,000. per month for assisted living.
This is a big problem, what are Bogleheads doing about it?

Paul
My Mom survived my Dad and she always said that her paid off house was her long term care policy. She always told us "in no uncertain terms"(as only a mother can :D ) that if she ever needed to move to a nursing home we were to sell her house and put her in the best place possible. She also made sure that we had the paperwork to sell her house.

When someone goes into assisted living many of their other expenses stop if they don't have a surviving spouse.

The extra long term care costs are only what is above their normal costs. If your normal retirement budget was $5,000 a month and you end up at long term care which costs $6,000 - $7,000 then the gap could just be a couple of thousand dollars a month.

She never needed long term care but her math was sound since her home equity in addition to her normal retirement budget would have been enough to pay for assisted living for at least ten and maybe twenty years. The house was not a terribly expensive house in a medium to low cost of living city in the mid-west.

That does not work as well if you have a spouse that is still living but the home equity can still be a safety net.

Delaying starting Social Security until you are 70 to get a larger benefit amount will also help pay for assisted living if you need it.

That is far from being foolproof since things can happen like a couple where a spouse needs LTC fairly young, or if you live to be 105 but you sometimes can't avoid all risks.
Watty, thanks for a perspective I haven't thought of before.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by celia » Thu Nov 09, 2017 6:08 pm

pkcrafter wrote:
Mon Nov 06, 2017 11:39 am
Well, this discussion certainly sets my mood for the day.
Where I live it cost between $6,000 - $7,000. per month for assisted living.
This is a big problem, what are Bogleheads doing about it?
First of all, don't believe the big costs that are often quoted. I have a younger relative who needs to live in assisted living and it costs $2,000 per month. Granted, this may not be the type of place that most of us would choose as many of the clients there are on government assistance, but she leaves for a walk, shopping, errands every day. She continued her regular office job while living in assisted living until her condition worsened and took public transportation to and from work.

What I am saying is that the cost depends on the type of services you need. My relative needed someone nearby in case something happened during the night, someone to prepare balanced meals, monitor meds, and do laundry. But because she started living there at age 50 or so, the family didn't feel she could afford more than that since she may still live a long life. So we found someplace near us that met her needs but didn't charge her for what she didn't need.

Another relative started showing Alzheimer's systems in her 80s along with other health issues. Her assisted living cost about $2,000-3,000 as it was in a group home where there was room for 8 clients and 2 staff members lived onsite. A regular house was turned into an assisted living facility and ramps replaced the front steps. Other than that, you would never have guessed it was assisted living. I have visited in several of these former houses and they are very nice. The house next door to my dad's was converted into one and he has never had any problem with it being there. There is also one at the other end of my block. I would never had known about this if a neighbor living near it hadn't told me. So instead of just considering facilities that house 100 people, why don't you find out where your neighborhood "home" is. A good place to start might be with the web page for your state's licensing of such facilities. For California, see:
https://secure.dss.ca.gov/CareFacilityS ... stedLiving

Social workers who help place patients when they are being discharged also know about these places. Since they are small, they don't advertise. Why would anyone need to advertise when they don't have room for more clients and don't want to be distracted by inquiry calls?

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by RetiredWithDementia » Mon Nov 13, 2017 9:56 am

Celia, there are fewer and feew places like you describe, but I hope if you need one that you find one. But for most of us, they don't exist or either we or our families simply don't want to live without professional care at hand. The Assisted section of where I live is $65K per year, include meals and cleaning and stuff. The good stuff is on on-site full time internal/geriatric doctor who has tons experience with alzheimer and the other dementias. I have Lewy Body thing. There is a huge wait list for this. The memory care and the skilled nursing is $120K per year, which covers everything needed. It has a huge waiting list. To have even a chance to get in to these levels of care, a person must first be a buy-in to the independent living section, and there is a endless list to get into the houses and duplexes, and a much lesser wait to get into one bed apartments. The entrance fees are huge except for the one bed apartment, then the fee is big. These are what we face as we get older, and fewer and fewer of what you describe, and fewer still if you want something tolerably nice and also full-service. Most places that claim full service are not full service, and everything is an add on fee. So watch out what you think is out there, because you might find it not there when time comes. I in the one bed apartment, because my wife stay in our house where grandkids live. I didn't want her to end her life just because mine was winding down. She comes for 2 or 3 nights a week to stay with me. I soon will be going to memory care, not so much because my memory bad, but short term memory is terrible, but because is see things not there and have big autonomic issues and other brain type issues that make it almost impossible for me to not be somewhere with professionals who know how to take care of me. I could have killed myself, but I like life, don't want to cheat my family, and I interested is seeing what happens as I crap out. Like said, I know and understand what is happening to me and I probably will know until a few months before I die, even though I will be for a couple years in the $125K wing for care. Don't fool self. If you have one of these diseases, what awaits you is worth the effort to be ready for it. Good luck.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Swimmer » Mon Nov 13, 2017 6:22 pm

You, sir, are an inspiration. Thank you for sharing your experience and for your thoughtful post. Sorry you and your family are dealing with this disease.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Sandtrap » Mon Nov 13, 2017 7:10 pm

Swimmer wrote:
Mon Nov 13, 2017 6:22 pm
You, sir, are an inspiration. Thank you for sharing your experience and for your thoughtful post. Sorry you and your family are dealing with this disease.
+1
🙏

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by RudyS » Mon Nov 13, 2017 8:40 pm

Swimmer wrote:
Mon Nov 13, 2017 6:22 pm
You, sir, are an inspiration. Thank you for sharing your experience and for your thoughtful post. Sorry you and your family are dealing with this disease.
+1 and more.

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"You, sir, are an inspiration"

Post by Taylor Larimore » Mon Nov 13, 2017 8:49 pm

RetiredWithDementia:

"Swimmer" said it better than I can: "You, sir, are an inspiration."

Thank you and best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by dodecahedron » Mon Nov 13, 2017 9:25 pm

celia wrote:
Tue Nov 07, 2017 5:24 pm
As far as the US Treasury, I don't know their procedures, but the IRS does know when someone has died and if a tax return has been filed or not.
The normal procedure for getting a refund that would have been due to the deceased is for the executor to file the final return for the deceased person and the IRS instructs the executor or surviving spouse to write "DECEASED" at the top of the return if it is a paper return. For an efiled return, tax software does the electronic equivalent of communicating the same information to the IRS. So the IRS doesn't automatically know that the taxpayer has died unless the executor or surviving spouse tells it so. (Of course, once notified, it can confirm the death by checking with the Social Security database.)

However, if nobody files a tax return on behalf of the deceased within the three year statute of limitations of the due date for the return, then any tax refund money that would have been due to the estate is permanently lost to the US Treasury. It is basically a "you snooze, you lose" situation for the heirs. This is very different from the handling of other types of unclaimed funds such as insurance, bank, or brokerage account proceeds. The IRS does not maintain an "office of unclaimed refunds" that allows procrastinating heirs to claim a refund more than three years after the filing deadline.

On the other hand, if the deceased had a filing requirement with a balance due and nobody files a final return on his behalf, then the statute of limitations does not begin until a return is filed, but penalties and interest for failure to file and failure to pay begin running as soon as the original missed tax filing deadline passes.

So--either way--conscientious executors need to make sure that a final return is timely filed for the deceased in order to fulfill part of their fiduciary duty to conserve the assets that belonged to the deceased. (As usual, it is possible for the executor or surviving spouse to request a six-month extension.)

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by fundseeker » Mon Nov 13, 2017 9:51 pm

snarlyjack wrote:
Mon Nov 06, 2017 6:13 am
My Mom qualified for assisted living. Problem #1 she didn't want to
go into a special home. #2 Where I live it cost between $6,000 -
$7,000. per month for assisted living. #3 We didn't have that kind
of money $72,000. per year.

So...what to do? Someone has to step up & really help out. In
our case that was me. I was 18, 19 & 20 years old. My Mom died
when I was twenty. Needless to say it was a hugh challenge. But
you gotta do what you gotta do.
snarlyjack, Well done! Awesome of you to step up! We should all be so fortunate to have a child step up that way!

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Sheepdog » Tue Nov 14, 2017 3:54 am

Swimmer wrote:
Mon Nov 13, 2017 6:22 pm
You, sir, are an inspiration. Thank you for sharing your experience and for your thoughtful post. Sorry you and your family are dealing with this disease.
RetiredWithDementia,
I am in my mid 80s and I am conscious of my shortcomings and your way of battling your disease is indeed an inspiration for me as well. I pray that you and your family will have peace in your journey.
God bless you and yours.
People should not say everything they think. They should think about everything they say.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by JCE66 » Tue Nov 14, 2017 7:47 am

As my name means, I am 67 retired and have Dementia with Lewy Bodies. It sucks.
RWD....How did you come to know you had dementia? Meaning, was there a moment of clarity where you said to yourself, "I have to get this checked out". Or was it your immediate family members who encouraged you to get examined. What was the turning point, if I might ask. Your answer will probably help me, and others like me recognize the warning signals in our parents and ourselves.

I have an elderly parent (turns 82 this month) who is starting to 'lose their edge'. He was born and raised in NYC, and was always incredibly fast with a quip, and deadly funny. Personally, I think he should have been a lawyer, but that is a post for another day. Now, my father is changing, and as his only son, I wonder. The quips are less frequent, not quite as fast, and repetition is more frequent. He lives some distance away (9 hours by car, 4-5 hours door to door by plane), and I suspect at some time in the future I will get a call from my stepmother asking me to intervene.

The other question I have is how long did it take for you to wind down and simplify your financial life. You saw what was coming, and took prudent steps to address it. What was that process like?

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by midareff » Tue Nov 14, 2017 7:51 am

1/1/2011 - 22 funds, today 11.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by Call_Me_Op » Tue Nov 14, 2017 7:59 am

It is a shame that the threat of cognitive decline pushes us toward consolidation, while at the same time increasing risk of identity theft increases the risk (of catastrophic loss) associated with consolidation of accounts.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by RetiredWithDementia » Tue Nov 14, 2017 9:09 am

Thank for responses. Whole idea for me writing is to help people who believe that not me, just someone else. That someone can be anyone. It is me and tens of thousands like. Most are very old, but much younger people can get early onset dementias of any kind. My Lewy Body thing hits most in 50s and 60s. As you get older, please think about future like the one you don't want, like Alzheimer, Parkinson's dementia, Lewy Body, or may other such bad bad diseases. Get house in order for both good times and bad times. Some people don't see it coming in time, but for some reason I did, then it got proven correct. Maybe because I was lawyer who did lots of medical and science stuff for big clients in trouble. But I don't think so. Some dementia people can't believe they have it. I mean they truly can't, that is part of the disease. The Lewy Body thing is known to allow us to think and understand until close to death. At least many of us. It is terrible to know what happening, but it also is a good think. Just don't think the good times will be here all the time, but enjoy good times for every second you can. Don't know why I started writing in here. I always used to read here, but I stopp some time back. But I came and looked I think a day or so back, and saw this topic. I had to say something. Good luck and happy times to all. Bill.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by MikeG62 » Tue Nov 14, 2017 9:19 am

JCE66 wrote:
Mon Nov 06, 2017 9:59 am
Bogleheads....Here is a related question on cognitive decline. Have you considered writing a letter to your older self, while you still have your full faculties? Or maybe making a video file? And then giving that to your child (or executor) for safe-keeping. It seems to me that as one experiences cognitive decline, they either a) don't realize it, or b) deny it outright. Or is that just wishful thinking?

I have been strongly considering doing this, so that my 'younger self' could tell my 'older self' that the time has come to relinquish control to my sons. Maybe something along the lines of 'Hey, it is time. Cognitive decline has these symptoms and if your sons are playing this file to you, it is because you are showing these symptoms. So it is now time to hang it up and trust your children. You knew this day would come."

As an aside...What would your 'younger self' want to tell your 'older self'?
This is one of the main reasons why I have both a Withdrawal Policy Statement (8 pages) and an Investment Policy Statement (4 pages). I hope they will make things easier as we age. If it ever gets to the point where I have trouble understanding what is in those documents, that would be a strong indicator that it is time to turn over management to someone else.

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Re: Morningstar: Cognitive decline in aging. A strong case for portfolio simplification?

Post by JDCarpenter » Tue Nov 14, 2017 9:34 am

celia wrote:
Tue Nov 07, 2017 5:24 pm
Sheepdog wrote:
Mon Nov 06, 2017 12:38 pm
nisiprius wrote:
Mon Nov 06, 2017 6:51 am
...-and that state treasurers are going to get a windfall in about ten years as people who have "gone electronic" on their statements start to die off.
I agree that state treasuries and maybe even the US Treasury and insurance companies will be getting free unclaimed dough.
I hope you realize that state treasuries don't OWN the funds that are turned over to them as unclaimed property. They hold them (and often pay interest) until someone proves they are entitled to them. We had a Boglehead several years back who found unclaimed property for an ancestor who died 50? years previously. No other descendants were interested in doing the work to claim the money or considered it "not theirs", but he was willing to do the genealogy (and enjoyed it although it took time) and probably got everyone else to sign off on it, so he could claim it.

...
Actually, the states do end up owning unclaimed property--time period will vary with each state's law. Moreover, some states, including a couple of important ones for investors, are getting more aggressive on escheating property--and the reason in many cases is to divert the funds into their general budgets. Here is link to WSJ article on two french scientists (Dr. Gilles Gosselin and Dr. Jean Louis Imbach) who sued for the 12million they lost as a result of Delaware's actions: https://www.wsj.com/articles/scientists ... 1503054001 If that is paywalled even after searching their names, here is a less comprehensive article that also discusses California and Pennsylvania in this context: http://www.ocregister.com/2015/10/19/st ... h-budgets/

FWIW, we have nonetheless gone all electronic. Not comfortable with first class mail given the amount of travel that we are now doing.
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