Health and cognitive issues at age 80 and beyond...and managing finances

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Jackson12
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Joined: Tue Oct 06, 2015 9:44 pm

Health and cognitive issues at age 80 and beyond...and managing finances

Post by Jackson12 » Wed Aug 01, 2018 8:39 am

I hope this post pertains to this board and is acceptable. If not, simply remove.

This is not an post aimed at medical diagnosis or advice.

While I know “ averages” don’t address individual health and cognitive history, i’ve been reading about the “typical” cognitive and health issues of those age 80 and over, including those who practice healthy lifestyles. Even without throwing dementia or Alzheimer’s into the mix, what I’ve read (as well as family history) has raised some concerns.

My wake-up call was when I realized that my spouse and I will be in our 80s within 15 years .

I’d be interested and grateful for input from those here who are age 85 or older -or those with friends family members in that age group. Do they still handle their finances themselves ( tracking expenses, managing assets ) without major adjustments or back-up support due to health or cognitive issues? .

I’m particularly concerned with cognitive issues at or over age 85, financial planning, and back-up plans. .

My father was sharp as a tack until his early 80s, until he was sidelined by a major health issue that left him cognitively impaired,

By the time she was 85, my mother realized her ability to handle daily finances, info she’d always managed well, was impaired. She asked me and her siblings to help keep track of her expenses. We did not reallocate assets ( my father had set up an excellent portfolio and it covered everything and still grew because, with our help, she stayed within her very adequate budget and was happy )

But without our help, she might well have outlived her assets.

So I’m wondering ...what back -ups are people here using ( or suggesting) to safeguard assets and to get assistance if cognitive ability and/or health slips significantly? Planning for family members to step in and help out or....? Using an advisor outside the family?

In our case, My father had set up partial management with a bank advisory service but we broke that off after there were sudden and high charges assessed without any notification and the advisors wouldn’t acknowledge the legalities, let alone offer any compensation. We had to take legal action to get our funds returned. .

So we have trust issues with that sort of assistance. But maybe our unfortunate experience is uncommon. .

J295
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by J295 » Wed Aug 01, 2018 8:50 am

A couple of quick notes for you on what works for us for my parents. We are 59, they are 85.

We all have general durable powers of attorney and powers of attorney for healthcare. Spouses are the first named agent, and a trusted child is the back up agent.

We all have estate plans, and lists of asset locations and computer passwords.

I’ve had a direct conversation with my father, who handles their family finances and is very astute. He told me that if his cognitive abilities decline and he instructs me to take financial action which I know is contrary to his long-standing philosophy, I can tell him I will do it and then not do it so that he doesn’t do something crazy. For example, if he were to tell me to sell everything and invest all in gold or some real estate venture, I could choose to talk him out of it or if he were in such a poor mental state that talking would do no good I can simply do a workaround to protect him.

Our adult children are all financially savvy, and if something happens to us sooner rather than later they have access to all the information they need to help us if we are incapacitated or close out our state.

Jackson12
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by Jackson12 » Wed Aug 01, 2018 10:01 am

J295 wrote:
Wed Aug 01, 2018 8:50 am
A couple of quick notes for you on what works for us for my parents. We are 59, they are 85.

For example, if he were to tell me to sell everything and invest all in gold or some real estate venture, I could choose to talk him out of it or if he were in such a poor mental state that talking would do no good I can simply do a workaround to protect him.

Our adult children are all financially savvy, and if something happens to us sooner rather than later they have access to all the information they need to help us if we are incapacitated or close out our state.

Thank you for your perspective . We have taken similar steps as far as healthcare power of attorney and our kids. I’m currently less confident of their ability to oversee our finances as their learning curve is still “in progress”. All but one child ( special needs) is financially independent but not yet at a point where they grasp the asset management, investing, and budgeting skills needed to fully assist us.

We have a trust and government assistance, as allowed by law, in place for the special needs individual. But if we were incapacitated tomorrow, it'd be a toss of the dice when it comes to our kids’ ability to keep our finances on track. They were raised to be financially savvy but that only goes so far and there’s individual variations...so we’re looking at options.

Ideally, their financial acumen will be strong in 15-20 years. They’re making great progress.

My mother would definitely have fallen for a former friends “ guaranteed investment” if we weren’t around to thwart that. I have that memory as a reminder of the importance of proper oversight.

afan
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by afan » Wed Aug 01, 2018 3:23 pm

We have a setup very similar to J295, only one child, so far, is ready to take over if needed. That child I would be perfectly happy to run everything now. We have told this person that they are welcome to hire Vanguard, or someone else, to manage things if it becomes too much of a hassle.

We pointed out that Vanguard would manage investments for a fee, or serve as trustee for a higher price. The kid is welcome to hire them in either capacity. Or to go with a different company.

Right now, hard to project, I would be more interested in a company that would handle routine bills. The investment management is dead simple and our adult child could do it in under an hour a year.

We also have a relative of our generation who could help now. May or may not still be able to run things by the time we are old enough to need the help.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

ralph124cf
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by ralph124cf » Wed Aug 01, 2018 5:21 pm

We are asking ourselves the same questions. We are approaching 70, and we do not have children, and no close relatives who are younger that we trust to keep our best interests in mind.

I understand that bank trust departments are not great, but they may be the only game in town.

Ralph

Gill
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by Gill » Wed Aug 01, 2018 5:56 pm

ralph124cf wrote:
Wed Aug 01, 2018 5:21 pm

I understand that bank trust departments are not great, but they may be the only game in town.

Ralph
Sad to hear such a comment after spending my entire career managing the financial lives and many related personal matters for grateful clients. I suggest you investigate further.
Gill

TravelforFun
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by TravelforFun » Wed Aug 01, 2018 7:04 pm

Problems can begin even before cognitive issues show up. My former neighbor, who was a widower, was scammed out of his assets by a hottie even though he was still mentally sharp, had a will, and his kids were near by. There wasn't anything anyone could have done to prevent it.

TravelforFun

CULater
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by CULater » Wed Aug 01, 2018 9:35 pm

Gill wrote:
Wed Aug 01, 2018 5:56 pm
ralph124cf wrote:
Wed Aug 01, 2018 5:21 pm

I understand that bank trust departments are not great, but they may be the only game in town.

Ralph
Sad to hear such a comment after spending my entire career managing the financial lives and many related personal matters for grateful clients. I suggest you investigate further.
Gill
Can you share your suggestions/recommendations for finding a good trust department/trustee? And what about ensuring that things will not change over time once you've found one?
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

FBN2014
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by FBN2014 » Thu Aug 02, 2018 3:15 am

You mentioned that you have a special needs trust for one child. Are your assets in a Revocable Living Trust that becomes a testamentary trust when one spouse passes and has assets remain in trust for other children? Trust should have provisions to protect assets for remaining spouse from predators or a second marriage and have creditor and divorce protection for your children. You could make children cotrustees now and consult with them on managing your finances to give them experience they will need in future. Sort of like on the job training. If they do well then you will have peace of mind, if they don't then it may be wise to use a corporate trustee to assist if and when your cognitive abilities decline.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

J295
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by J295 » Thu Aug 02, 2018 7:16 am

Gill » Wed Aug 01, 2018 5:56 pm

ralph124cf wrote: ↑Wed Aug 01, 2018 5:21 pm

I understand that bank trust departments are not great, but they may be the only game in town.

Ralph
Sad to hear such a comment after spending my entire career managing the financial lives and many related personal matters for grateful clients. I suggest you investigate further.
Gill
Although, as posted above, our kids could handle things for us as needed (and I for my parents) .... I would not hesitate to use our local bank's trust department ..... I'm probably fortunate and unique in that I know many the bank owner (family) and they are top notch people and their trust department reflects their virtues ... sure they charge like everyone else but it is worth every penny .... in fact, when I was still working and raising a family they were the back up trustee in my parents' revocable trusts (after spouse) because even though I was capable we all decided that I was way too busy working and raising a family with my spouse to take on this additional financial task (and we all preferred that if my parents then needed help that my sisters and I could be available to provide the day to day help and leave the financial work to someone else) ... corporate trustee also keeps family harmony because brothers/sisters can't second guess what the "helping" sibling is doing financially for mom/dad ....

but, I agree with those who have trouble finding a great trust officer/trust department ... it's probably not easy .... we are lifelong residents in a middle america town of 300,000 and my professional and charitable life introduced me to a large number of bankers, financial advisors, lawyers, doctors, etc. so I have a pretty good lay of the land

Gill .... nice to know your background and the services you provided to help others during your professional life. Appreciate you sharing.

GAAP
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by GAAP » Thu Aug 02, 2018 9:11 am

My mother had no issues managing money right up until her death at 88. I'm hoping that I'll do that well.

FBN2014
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by FBN2014 » Thu Aug 02, 2018 9:18 am

GAAP wrote:
Thu Aug 02, 2018 9:11 am
My mother had no issues managing money right up until her death at 88. I'm hoping that I'll do that well.
Good genes is a positive but you should have a backup plan in case it doesn't work out that way.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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Sandtrap
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by Sandtrap » Thu Aug 02, 2018 9:23 am

You brought up a poignant issue, none are immune.
Thanks for posting.

Health and cognitive issues don't start at age 80, all at once. Like rust on steel, it starts slowly over a long period of time.
(IE: we loose our "noodles"/"marbles" one at a time.)

This is all the more reason to perhaps take a comprehensive approach toward "all" the challenges that come with aging.

1. Estate planning. (systems and protocols in place, not only in the event of one's death, but mental incapacity).
2. Integrating an IPS Statement as guidelines for "hares" as part of one's trust or will, etc.
3. Making sure that one's spouse is taken care of as well as oneself. And, the burden of managing affairs is lifted from one's spouse as his/her faculties decline. IE: (my MIL is 94. Her deceased spouse was a "Boglehead" with good result).
4. Making sure our trustee, executor, person or family member with POA is knowledgeable and informed. (like fire drills).
5. And so forth.

More importantly:
These types of measures not only prepare for the inevitable, but actually increase one's quality of life with aging by reducing the stress and worry of "what if". As well as, delegating the burden of financial and other life management to other responsible and caring parties as we age.

aloha :D
jim

afan
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by afan » Thu Aug 02, 2018 2:30 pm

Well, SOME health and cognitive problems come on Suddenly. That is why the call them "strokes" and heart "attacks".

Gill,

For all my whining about costs, I recognize that I am a hard core, cheap, boglehead. I would be most happy if my trustee put everything in a three fund portfolio and made no claims of investment expertise beyond that. I would hope they would charge a flat fee for such management but I have yet to find a bank that would do that.

I gather that for larger trusts banks will negotiate their fees depending in part on the nature of the investment and the amount of liability they assume. Less for a portfolio all in marketable securities. More if it holds residential real estate. More still if it is running a business.

I have no idea what the costs (as opposed to fees) are for a bank to administer a 3 fund trust. My ideal would be a reasonable fee for administration, percent of assets if that makes sense, and a flat fee for the mutual fund portfolio. I keep hoping the industry gets there.

It is remarkable how often one hears of non fiduciary investment managers swindling clients and how rare it is for trust departments. I suspect the integrity is built into the way they operate. People who want to get rich at clients' expense figure out that the culture at trust departments makes that just about impossible. So they don't cheat or steal, which is a major consideration when the beneficiary cannot effectively oversea what they are doing.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

Jackson12
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Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by Jackson12 » Thu Aug 02, 2018 3:16 pm

J295 wrote:
Thu Aug 02, 2018 7:16 am
Gill » Wed Aug 01, 2018 5:56 pm

ralph124cf wrote: ↑Wed Aug 01, 2018 5:21 pm

I understand that bank trust departments are not great, but they may be the only game in town.

Ralph
Sad to hear such a comment after spending my entire career managing the financial lives and many related personal matters for grateful clients. I suggest you investigate further.
Gill
Although, as posted above, our kids could handle things for us as needed (and I for my parents) .... I would not hesitate to use our local bank's trust department ..... I'm probably fortunate and unique in that I know many the bank owner (family) and they are top notch people and their trust department reflects their virtues ... sure they charge like everyone else but it is worth every penny .... in fact, when I was still working and raising a family they were the back up trustee in my parents' revocable trusts (after spouse) because even though I was capable we all decided that I was way too busy working and raising a family with my spouse to take on this additional financial task (and we all preferred that if my parents then needed help that my sisters and I could be available to provide the day to day help and leave the financial work to someone else) ... corporate trustee also keeps family harmony because brothers/sisters can't second guess what the "helping" sibling is doing financially for mom/dad ....

but, I agree with those who have trouble finding a great trust officer/trust department ... it's probably not easy .... we are lifelong residents in a middle america town of 300,000 and my professional and charitable life introduced me to a large number of bankers, financial advisors, lawyers, doctors, etc. so I have a pretty good lay of the land

Gill .... nice to know your background and the services you provided to help others during your professional life. Appreciate you sharing.
Our bank trustees swindled us out of $30k in spite of a fiduciary arrangement and here’s how:
1.They sent no notice or warning of the huge jump in fees

2. These fees soared in spite of no significant change in asset value.

3. I caught the increase and couldn’t believe it. The 30k was over a 6 month period and I take full responsibility for not checking monthly statements sooner. After years of predictable fees, I let down mY guard, my parents were aging and and I got behind in exercising due diligence. That’s on me.

However, This was a well known and so- called reputable bank. I double checked my math with an accountant. I then called bank officers. We had a contract that stressed the bank was a fiduciary and the fees were clear. My parents had used them without problems for many years.

4. They insisted they had notified me, in writing, of increased fees. They had not. I asked for proof of notification. They said they would send it.

5. When no notification was forthcoming and they refused to refund fees, ,I retained a lawyer and removed our assets from the bank. It took a year to get our fees back, a year when that $30k obviously provided no gains for us.

6. They never produced proof that they notified me.

7.We got our fees back but not the lost interest. Part of our fees went to the lawyer.

I don’t trust bank trustees. Period.

afan
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Joined: Sun Jul 25, 2010 4:01 pm

Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by afan » Thu Aug 02, 2018 6:09 pm

That is disappointing. It still seems to be rare.

Did the bank eventually agree to refund the fees or did it take a court order?
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

FBN2014
Posts: 465
Joined: Sat Mar 08, 2014 3:07 pm

Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by FBN2014 » Thu Aug 02, 2018 7:05 pm

Jackson12 wrote:
Thu Aug 02, 2018 3:16 pm
J295 wrote:
Thu Aug 02, 2018 7:16 am
Gill » Wed Aug 01, 2018 5:56 pm

ralph124cf wrote: ↑Wed Aug 01, 2018 5:21 pm

I understand that bank trust departments are not great, but they may be the only game in town.

Ralph
Sad to hear such a comment after spending my entire career managing the financial lives and many related personal matters for grateful clients. I suggest you investigate further.
Gill
Although, as posted above, our kids could handle things for us as needed (and I for my parents) .... I would not hesitate to use our local bank's trust department ..... I'm probably fortunate and unique in that I know many the bank owner (family) and they are top notch people and their trust department reflects their virtues ... sure they charge like everyone else but it is worth every penny .... in fact, when I was still working and raising a family they were the back up trustee in my parents' revocable trusts (after spouse) because even though I was capable we all decided that I was way too busy working and raising a family with my spouse to take on this additional financial task (and we all preferred that if my parents then needed help that my sisters and I could be available to provide the day to day help and leave the financial work to someone else) ... corporate trustee also keeps family harmony because brothers/sisters can't second guess what the "helping" sibling is doing financially for mom/dad ....

but, I agree with those who have trouble finding a great trust officer/trust department ... it's probably not easy .... we are lifelong residents in a middle america town of 300,000 and my professional and charitable life introduced me to a large number of bankers, financial advisors, lawyers, doctors, etc. so I have a pretty good lay of the land

Gill .... nice to know your background and the services you provided to help others during your professional life. Appreciate you sharing.
Our bank trustees swindled us out of $30k in spite of a fiduciary arrangement and here’s how:
1.They sent no notice or warning of the huge jump in fees

2. These fees soared in spite of no significant change in asset value.

3. I caught the increase and couldn’t believe it. The 30k was over a 6 month period and I take full responsibility for not checking monthly statements sooner. After years of predictable fees, I let down mY guard, my parents were aging and and I got behind in exercising due diligence. That’s on me.

However, This was a well known and so- called reputable bank. I double checked my math with an accountant. I then called bank officers. We had a contract that stressed the bank was a fiduciary and the fees were clear. My parents had used them without problems for many years.

4. They insisted they had notified me, in writing, of increased fees. They had not. I asked for proof of notification. They said they would send it.

5. When no notification was forthcoming and they refused to refund fees, ,I retained a lawyer and removed our assets from the bank. It took a year to get our fees back, a year when that $30k obviously provided no gains for us.

6. They never produced proof that they notified me.

7.We got our fees back but not the lost interest. Part of our fees went to the lawyer.

I don’t trust bank trustees. Period.
Nobody cares about your money as much as you. There will always be some bad experiences with banks, trust companies, attorneys, etc. I think one way to mitigate any shenanigans is to have a trust protector watching the trustee with the power to remove the trustee if necessary. The first attorney I used to write a will when I was first married was trustee of an elderly client'ss trust and stole over $270,000. His partners in the law firm found out and turned him in. He was disbarred but stayed out of jail by leading guilty and making restitution. He also was trustee for his sister and stole $100,000 from her. A real credit to the profession.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

Jackson12
Posts: 918
Joined: Tue Oct 06, 2015 9:44 pm

Re: Health and cognitive issues at age 80 and beyond...and managing finances

Post by Jackson12 » Thu Aug 02, 2018 9:11 pm

afan wrote:
Thu Aug 02, 2018 6:09 pm
That is disappointing. It still seems to be rare.

Did the bank eventually agree to refund the fees or did it take a court order?
They returned a potion. Most of it. We settled to avoid higher legal costs. Then we paid the attorney who was both extremely competent and sympathetic and so he charged reasonable fees. We could have lost far more. It still stung but it also motivated me to be more diligent, to be vigilant, and not assume “ fiduciary” meant advisors looking out for us.as well as themselves (financially) .

I don’t mean to imply that what happened to us was the norm. But we weren’t alone. With that bank.

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