February 02, 2013 • By Dennis Beaver
“Grow old along with me. The best is yet to be; the last of life for which the first was made.”
“At that time those words were written,” observes Chris Kennedy. “Anyone over 42 was old, for that was the life expectancy. Browning’s world saw few of the monumental financial, health and emotional issues facing today’s aging population and their families.”
As a California licensed professional fiduciary with Visalia-based Perine & Dicken Professional Fiduciaries and Conservators, Kennedy is in a unique position to see in slow motion what often becomes a “train wreck,” the result of seniors and their families failing to plan and not grasping the realities of what it means to age. As he tells You and the Law:
“Without early, careful planning, baby boomers who have worked hard and therefore accumulated something to lose are much less likely to find ‘the best is yet to be.’
“There is also a reality about marriage vows being ‘for better or for worse,’ as chances of things being ‘for worse’ increase as we get older, due to declining health and mental functioning. This can lead to the good times of youth being replaced by the realities of aging, such as one spouse becoming a caregiver for the other. This can also place huge demands on family to assist in even the most basic functions so often taken for granted.
“The challenges our longer lives bring can be difficult for the elderly and their family, especially when the kids — who would normally help — now live far away. The good news is that these issues can be dealt with before a crisis develops,” he points out.
The buy-in to giving up control requires cooperation
One scenario lawyers often see is when the keen mind of earlier years begins to fail, perhaps due to a stroke or other medical condition, making the senior vulnerable to such things as financial abuse. Without proper planning to avoid this, assets intended for their care and for distribution to loved ones later may be endangered.
“It can be challenging to get mom or dad to plan for these possibilities, and a very difficult discussion to have. It’s a rare parent who admits that physical and/or mental capability may decline (or is declining), and they are afraid of making a bad decision. Few people are willing to give up control over any part of their lives, making it so tough to acknowledge that help may be needed.
“But those with vision — who recognize the need, and have trusted family members watching out for them — see the benefit of planning,” Kennedy notes.
There are effective ways this safety net can be established, such as a family trust or a durable power of attorney, as Kennedy described:
“A durable power of attorney is executed by dad while he has capacity to do so and remains in effect even if he becomes ‘incapacitated’, as defined in the document. Someone such as a trusted family member is named agent, with those duties outlined within the document.
“These would include writing checks, paying bills and making other financial decisions when dad is incapable of doing so. It’s a good idea to do an advance health care directive as well, to address health care and end-of-life decisions,” Kennedy suggests.
“Another option is to set up a trust, transferring specific assets into the trust, naming a trustee to administer it, and spelling out how the assets are to be used, such as care and maintenance of dad. This option minimizes the chance of misuse of the assets and of someone taking advantage of him.”
When professional fiduciaries enter the picture
“If there are no family members nearby (or at all) or if there’s a family dispute, then a professional fiduciary is often appointed as trustee by the court as dad’s ‘guardian angel,’ administering to his financial needs and preventing him from becoming a victim.
“On rare occasion you will find that dad admits he is declining and is vulnerable. Then he meets with an attorney, establishes a trust, and we’re asked to manage the trust per its specifications, such as providing for dad’s care and distributing assets to the beneficiaries.
“We see far too often what it means for someone to work their entire life, only to have illness and mental deterioration open a door, allowing bad people to take it all away — because the right steps were not taken early on.
“This simply does not have to happen,” concludes Kennedy, who truly is witness to the human condition.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.