Estate Planning

Aug 2016


A couple weeks ago I met with a new client. She’s a woman in her mid to late 70s who has recently lost her husband. Our conversation mostly focused on her portfolio and the changes needed to help her accomplish her goals and objectives. However, we also talked about estate planning and in particular, what will happen if she is no longer able to handle her financial affairs.

When it comes to talking about estate planning, most people only focus upon what happens at the time of their death. However, in today’s complex world that is no longer sufficient. We all must have a plan in place to deal with our finances if we are either physically or mentally unable to do so. If we are unable to handle our own affairs there needs to be someone who can take over and seamlessly manage our finances. Someone we have trust and confidence in and someone we know will operate in our best interest.

What made the conversation with my new client unique was that the people you would think would typically be in a position to take over, her kids, were not the people she wanted. She explained that she did not have a very good relationship with her kids and that she felt that from a financial standpoint they have taken advantage of her in the past and thus she did not have confidence in them. Unfortunately, stories like this are not unusual. In fact, when you look at the statistics, you will see the great majority of senior financial abuse cases come from members of one’s family. Family members and children are the most common choice; however, in many situations such as the one at hand, they are not the best choice.

I cannot stress enough how important it is for everyone to have someone in place to take over if they are unable to do so. Although family members are the natural selection, it doesn’t have to be a family member. In many situations close friends are better alternatives. In addition, there’s nothing to prevent you from having two people take over so that there is a natural checks and balance in place. The bottom line is that if you don’t appoint someone and you are not able to handle your finances, you could be in real trouble.

For many people, particularly for those who do not want to name a family member, they tend to put their head in the sand hoping the situation never occurs. Unfortunately, if the situation does occur and you don’t have something in place, judges, courts and lawyers are going to be involved and I can assure you that is not something you would want.

My recommendation, particularly for people who are up in age, is to make sure that something is in place. Family members are the obvious choice but if that does not work for you, you need to come up with a plan B. The idea of doing nothing and hoping that nothing bad happens is much too risky.

One last note, one of the best ways to accomplish this is through a general durable power of attorney. The general durable power of attorney allows someone to operate on your behalf without having judges, courts and lawyers get involved in your personal affairs.

Good luck!