Here’s another practical problem we’re facing.
Background: For decades, Meda and I had a division of labor. She had the secure full-time job with benefits that we could rely on. I had a number of short term or part-time jobs, and did freelance writing along the way. But I was the primary cook, travel planner, and cat litter box monitor. Keeping our personal finances in order (bill payments, investment decisions, tax preparation, etc) was also part of my job.
As we recently prepared to fly to California for treatment at UCSF, I was scrambling to finish our federal and state tax returns. I made it, but the experience made me realize how quickly I could find myself unable to attend to those financial matters if my medical condition took a rapid and unexpected turn for the worse.
We established a living trust in 2018 that holds almost all of our assets–bank accounts, savings, investments, title to our home, etc., although it didn’t change management of our day to day finances.
So what should we do now?
It seems to me the question is how to go about selecting a third party to take over bill paying and tax preparation, or be ready to do so on short notice if I am suddenly unable to do the job. And how to do it with maximum legal protections for ourselves.
I know this must be a common transition for those with assets to manage, but before we reached that certain age, it never seemed like something we needed to be worried about. Now it is!
Before calling our bank to see what they can do, I thought that I would again solicit advice from readers, especially from those who have already managed such a transition. Please email me at ian@ilind.net, or text at 808-955-1819.
And I thank you in advance for sharing your experience.
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Is there a reason that Meda can’t take over?
Regardless of whether Meda would be taking over or not, you should start, right away, to get her informed of all your accounts, passwords, etc, and make sure she has access to all of them.
Don’t forget to explain your investments, and why you invested in the things you did. Make sure she knows about required minimum distribution (RMD) requirements for all of your IRAs, 401ks, and any other pre-tax retirement accounts either of you has.
You might want her to have power of attorney so she can access accounts that are in your name only, such as retirement accounts. If you’re incapacitated but need to take RMD from those retirement accounts, you need to make sure she, and/or someone else you choose, can take care of that. Tax consequences are pretty severe if you don’t take RMD.
Even if she hires someone to take on management of finances, she needs to know what’s going on.
Good Luck on finding some sage advice. And please share it with us, at least the kupuna readers.
Yes its a great question & if you can publish some comments on how others have done this it would help me also!
Your question regarding future responsibility for long-term finances is a good one, Ian. I hope you’ll share your findings as I think there are many of us out here who would appreciate any sound advice you discover. Remembering back, my mom passed away early into my Dad’s retirement to the Crystal Beach area near Galveston, Texas. He lived alone there and was very independent, handling all of his affairs himself. I inherited his excellent record keeping when he passed in his late 80’s. My son and daughter in-law plan to retire here on the Big Island, so there will be some off-loading there, but I have always handled my own affairs and figured I’d follow in Dad’s footsteps – but we never know. I’ll look forward to whatever you can share.
FWIW the standard practice with trusts that the trustee doesn’t want to manage themselves is three layers of professionals, each with legally defined fiduciary responsibilities:
1. An attorney to oversee the trust’s required legal filings, income, expenses and disbursements, per the stipulations of the trust;
2. A CPA firm to prepare an annual financial report and any tax filings, delivered to the attorney, who then delivers them to the trustees / recipients;
3. A professional investment firm that manages the trust’s assets: every big brokerage firm has “wealth management” divisions that provide asset management, and of course there are family-trust focused boutique wealth management firms aplenty.
None of these services is cheap, but if you want some assurance of fulfilling legal requirements and professional conduct, then this is the conventional hands-free way to go. Even these services require some basic oversight, of course: trust but verify.
Hope this helps as one path to consider.
Chuck
Ian, would your executor take on that role?
We hired a good CPA to oversee our taxes. We are both public sector retirees and have a couple of rental properties along with part time work. We couldn’t keep up with our quarterly estimated taxes and annual filings but now it’s not a problem. We use OCCPA. I understand that some persons who receive Social Security benefits, also have a representative payee to manage those benefits on their behalf. I don’t know if that’s what you’re looking for. Either way, I think your question is something that’s crossed the minds of many people in Hawaii, And I’m kind of hoping you’d share your experience regarding this. Glad you’re back home.
My nonprofit uses Shane at OCCPA too.
Maybe this?
https://maxlegalservices.org/services/
hello Ian – we engaged MaxCorp – Maximum Legal Services Corporation .
can’t report on the quality of services because we’re still breathing ….
– ludwig
My friend was just mentioning about how one of her aunties (no spouse or kids) has a personal financial assistant through Bank of Hawaii, where she does all her banking.
Another friend (widowed, no kids) asked his trusted friend with a knack for handling finances to file his taxes.
Check out https://thecaregiverfoundation.org/our-services/daily-money-management
Btw, as part of your estate plan, you might consider updating 2018 living trust due to tax law changes.
Also, do you have will with pour-over provision to avoid probate? Powers of attorney for finance & health care?
Check out https://www.hawaii.edu/uhelp/
Aloha Ian and Meda,
Although I haven’t been in touch, I’ve been following your recent challenging journey from here in North Carolina. So many people are rooting from far and wide for the two of you right now. Anyway, I’m responding to your recent email regarding money management. I recently attended an event in Charlotte where I met a woman who does exactly what you were discussing in your post. She assists seniors in keeping up with finances, paying bills, etc. She primarily works with people in assisted living, she was telling me. I decided to look a little further and found that there is a national organization of daily money managers who assist seniors. I didn’t look at the directory to see whether there is anyone in Honolulu, but perhaps you might want to follow up. Here’s the link to the organization: https://secure.aadmm.com/.
Jenny, Jake, Jasmine and I wish you both the best!
Marilyn
How nice to hear from you!! It does sound like North Carolina is treating you well! As to the daily money managers, I had found references to the same organization. But it does not appear to have any members in Hawaii.
There must be quite a tale of getting them from Hilo to North Carolina!!
Moving my fur family was a huge endeavor – I used a pet relocation service (Tail Waggers) and can’t say enough great things about them. They got them to the mainland safely and seem genuinely caring.
That’s really amazing!
Hey Ian,
It’s been so good to see the photos of the cats, and Grace and I are so happy that you’re home safe and sound. I know the chemo and other interventions start soon, and we’re sending you all of our energy. I work with Advisor, and I would recommend you schedule a call with them to discuss the needs you laid out in this thread. I’ve been extremely happy with the planning, strategy, and support I’ve gotten from them. They do my taxes every year, are registered fiduciaries, have never tried to sell me a financial product, and their fees are very fair. They don’t charge an extortionate 1% of invested assets like so many other firms do. Here’s their home page: https://advisor.com … reach out if you have any questions. Robert and Grace.