Wealth Administration as We Age

After decades of advising families on tax and estate planning, I have come to the conclusion that the year of attaining age 80 is often the most appropriate time to make a dramatic shift in how families are currently handling and communicating about their personal, financial, tax and legal affairs.

Most people keep some level of privacy or secrecy between themselves and their loved ones about their personal affairs and try to be as independent as possible.

By age 80, most people still have the energy and capacity to handle their own affairs. However, with each passing year thereafter, estate planning and financial changes and updates may be challenged or challenging, and stamina, vision, capacity, energy, health, and memory fade. The best time to organize your affairs is when you still can, and certain planning and actions take time to implement.

If you have a poor family health history, if you will need Medicaid, or if you are high net worth, or if you will need life insurance to cover post-death cash needs, then consider instead the year of age 75 or earlier as your time to act!

Take this year of age 80 to do comprehensive planning, simply your life, start communicating better, stop DIYing important professional tasks, and embrace a gradual shift in how personal, legal, tax, investment, business, and financial affairs are being conducted.

Consider doing one important task each month of the year of age 80, or any time you wish you had more family support, making these milestones more achievable:

1. Let loved ones and professional advisors in on where all your important tax, business, real estate, cash, savings bonds, investment, and estate planning documents are located and create a digital portal or platform for copies of important documents to be shared with advisors and fiduciaries;

2. Gather documentation on all your assets and liabilities, including account numbers, ownership and titling, beneficiary designations, advisor or agent contact information, and values. Update asset tiling and beneficiary designations as needed;

3. Share the location of all passwords with a trusted loved one or advisor;

4. Revisit all fiduciary roles (share documents, communicate the roles, and consider alternates);

5. Update all estate planning documents using an attorney, including undertaking business succession, Medicaid and wealth transfer planning, as applicable. Flowchart or summarize the key aspects of your estate plan to ensure it aligns with your wishes;

6. Hand off all legal, tax, bookkeeping, and investment tasks to a professional, giving specific guidance as to your goals and desires;

7. Simplify your financial affairs, consolidating bank accounts and investments under fewer financial institutions and advisors;

8. Do a whole house clean-out, donating unwanted items, and create a memorandum disposing of your personal possessions at death (if mentioned in your estate planning documents);

9. Convey information and tracking on required retirement distributions to successor beneficiaries;

10. Start having quarterly meetings or conversations with professional advisors and loved ones regarding your legal, tax, financial, business, and investment affairs;

11. Engage in cashflow and asset allocation planning with a financial advisor to project future net worth, living costs and income. Look into costs and options for future living arrangements; and,

12. Create list of all medications and communicate with loved ones about your healthcare providers, medications, and end of life guidance (including cremation/burial/funeral and whether you desire to receive life saving procedures).

If you are a family member, friend or advisor of someone closing in on age 80, it’s important to help! Share this list and initiate a meeting to get the process started!

For those of you approaching age 80, it’s important to ask for help! Getting organized, getting professional advice, and getting into the habit of regularly communicating with loved ones, while you still can and have time to plan, will go long way toward avoiding chaos and confusion as you age.

Keeping trusted advisors and loved ones in the dark about your financial affairs, failing to use professional advisors, failing to update your important legal and investment documents, and failing to relinquish important tasks are the primary causes of errors, confusion, missed deadlines, waste, and distress.