America’s baby boomers are living decades longer than previous generations. However, that longevity comes with challenges as seniors age. From increasing health concerns to the heightened need for financial safeguards, it is imperative that older Americans prepare for these complexities during their golden years.
With the right team of advisors and a proactive plan to protect assets, seniors can lessen the stress on themselves, spouses, and family members as their needs change.
Health Related Challenges
While the average American lifespan has increased, most U.S. adults live the last 12 years of their lives with at least one, if not multiple, chronic health conditions.
Studies show 10% of Americans over 65 have dementia. Another 22% of seniors will experience mild cognitive impairment. Navigating a complex financial or estate plan is not easy when a client’s cognitive health is deteriorating.
When clients can no longer express their desires, having a comprehensive plan in place to carry out financial, legal, and healthcare wishes is invaluable.
Financial Abuse and Fraud
People of all ages succumb to financial scams, but elderly Americans face a potentially higher risk. In 2023, the FBI reported senior citizens (Americans ages 60+) were defrauded out of $3.4 billion through the perpetration of tech support scams, romance scams, government impersonation scams, and investment scams. The senior demographic is often targeted by criminal enterprises due to the retirement accounts they have built and the belief that older adults are unable to recognize when they are being defrauded.
Adults dependent on family members, friends, or caregivers are also at risk for financial abuse. Elder financial abuse occurs when someone illegally or improperly uses the money or belongings of a person aged 60 or older for their own personal use. The majority of these cases (about 72 percent) are perpetrated by someone the victim knows and account for $20.3 billion in losses. Unfortunately, only 12.5 percent of cases are reported. Seniors may be hesitant to report someone they know for many reasons:
- The offender is someone who socializes with them and assists them in their daily activities.
- The victim does not want to cause hurt or family rifts.
- The victim feels embarrassed by the situation.
Adults with cognitive or encumbering health issues are the most vulnerable to financial abuse and fraud.
While older adults can lead robust active lives, it is important to be prepared for life’s transitions. Planning ahead can provide great relief if health challenges, incapacity, or financial abuse or fraud occur.
Prepare, Plan, and Protect Your Assets
It is best to address the changes that come with aging when an individual can still communicate his or her desires and develop a plan to protect their financial future.
Proactively planning for incapacity can provide invaluable protections, ensure wishes are followed, and reduce the burden placed on family and loved ones. In addition to establishing a will and/or trust, clients should consider preparing the following:
Healthcare and Durable Power of Attorney (POAs)
A healthcare or financial power of attorney gives the individual(s) selected the authority to make healthcare and financial decisions on one’s behalf should they become incapacitated. Review documents to make sure the appointed POAs are willing and capable of fulfilling the duties required. Ongoing discussions with the POA(s) help everyone understand the desires of the individual as his or her needs change. These documents should be reviewed and updated every 3 years for those in their 70s and early 80s but more frequently for individuals who are 85 and older.
Plan for incapacity
It is important to have difficult conversations about the future in case an unexpected event renders one incapacitated. Without a plan for incapacity, the onus of making difficult decisions is left to family and loved ones. Having an established plan in place before incapacity ensures wishes are followed and makes future decisions easier on the family, trustee, and POA(s)
Secure a co-trustee
Appointing a co-trustee can allow a grantor or beneficiary to receive help while also remaining involved in the administration of the trust. This is an excellent option for those who don’t want to overwhelm their loved ones or family members.
Distinctive Care Services Can Help Provide Peace of Mind
Shifting responsibilities from family members or loved ones is one reason individuals search for a corporate trustee to add to their team of advisors. For aging individuals, a corporate trustee offering enhanced services for life’s transitions can provide support well beyond the typical fiduciary relationship.
Cumberland Trust has the flexibility and dedication to provide high-touch administration assistance to those needing an extra level of care. Our trust administration team is composed of sensitive, caring professionals who have an exceptional ability to work with critical and complex situations specific to each family.
Cumberland Trust’s Distinctive Care Services can assist in the coordination of a full range of tailored services.
- Collaborating with clients and their professional advisors to discuss budgeting, long-term planning, financial resources, and annual reviews.
- Working directly with appointed individuals (conservators, guardians, third-party service providers, and financial POAs) to facilitate trust-related services.
- Facilitating the setup and scheduling of bill pay for expenses paid by the trust.
- Coordinating third-party personal finance, healthcare services, and residential support.
Distinctive Care Services provides care over and above that of Personal Trust Administration, supporting our clients as they navigate complex issues, often saving them time, money, and confusion. Our goal is to provide individuals and families with the resources and assistance needed to feel confident when making choices about their care.
How Distinctive Care Services Have Helped Our Clients
Two Cumberland Trust clients, Mr. and Mrs. Smith, have sophisticated financial and investment backgrounds as well as a high net worth.
Mr. Smith had been serving as trustee of the couple’s revocable trust but began facing the progression of Parkinson’s Disease. As her husband’s primary carer, Mrs. Smith found the added responsibility of administering the family financials overwhelming. Both Mr. and Mrs. Smith wished to avoid burdening their children with difficult decisions regarding their parents’ finances and long-term care.
The Smith’s strong partnerships with their financial advisor, estate planning attorney and CPA have always guided their decisions. To further support the family, Cumberland Trust collaborated as a co-trustee for the Smiths, working closely with them and their established team of experts. To hear more about how Cumberland Trust assists Mr. and Mrs. Smith with their trust’s administration, read about their experience here.
Distinctive Care Services offers fiduciary assistance beyond personal trust administration. Adding a corporate trustee to your client’s team of advisors can assist them through many of the obstacles they may face as they age.
Learn more about how Cumberland Trust can help your clients through times of change or loss.