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Incompetence can come slowly - what is your strategy?
Old 01-07-2017, 08:15 AM   #1
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Incompetence can come slowly - what is your strategy?

In a thread elsewhere about late in life annuities, this caught my eye.

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Originally Posted by harley View Post
because I'm a control freak, especially about money. I just don't see a situation other than mental incompetence where I would turn over control.
My mindset is very similar to harley's.

I'm guessing most people won't turn over control if they are competent. However, incompetence can come on suddenly (medical crisis such as a stroke or an accident leaving one unable to manage one's affairs) or slowly (imperceptible cognitive decline).

The slow scenario is hard for anyone from the outside to get a handle on (remember, it's imperceptible). And it's not going to be recognized by the victim himself/herself who is losing executive management (frontal lobe) ability to make good decisions.

In the latter/slow scenario, one seems to be competent, but is plenty able to follow - to the letter - the instructions of scammers to wire money, or to put money into the investment fund of "a friend of a friend," or to be cat-fished by a new lover on the internet.

This happened to someone in our family as I've mentioned before. It took awhile for the relatives closest to the victim to figure out what was going on. She was a very strong personality and did not seem different in any way other than how she was handling her money. She herself did not believe she was being defrauded. In fact, they eventually discovered she was a whole-hearted participant in her scammer-aided financial suicide. Earlier intervention could have shielded some of her savings.

One possible safeguard I've heard of... I have an aunt who took her daughter to meet with aunt's FA. Aunt has given FA a mandate to notify the daughter if she - the aunt - seems to be doing unusual withdrawals.

One can read about the elderly being scammed in many ways. It doesn't much matter if you have a lot of money or a little money if the scammers get it all.

So, whether you are like harley and me (or not) what is your plan to prevent your financial suicide aided by scammers and other criminals...?

(If you don't wish to discuss, or feel this is repetitive, feel free to ignore)
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Old 01-07-2017, 08:36 AM   #2
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Have not put any thought into this scenario. I'm 53 and DW is 50. I guess I assumes that we both will not become "incompetent" at the same time. There is no Alzheimer or Dementia in our families. All of our older relatives have been or are very sharp in the mind, but also very stubborn which I think is normal with age. More likely we become immobile before loosing our mental state. We have no kids so there is really no "go to" person to take over. Right now my strategy on this is if I reach 75 (god willing) then we probably need to identify someone (or institution) we trust with taking this over if we do become incompetent. The landscape of family & friends that we trust now will most likely change by the time we get there so no need to plan for this scenario right now.
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Old 01-07-2017, 08:56 AM   #3
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This scenario is the only reason I am considering a later in life spia. At some point I also plan to give one of my nephews some form of POA to help in handling matters when I'm older. He works for a financial firm and is very conservative. Also trusting, but I'm not ready to sign on the dotted line just yet. The question is....when to do so? I'm 62 now and plan to hold off a few years, but don't want to stroke out before doing so.
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Old 01-07-2017, 09:03 AM   #4
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Went through this with my dad. His entire worth was in equities. He always did his own research and investments and was licensed to trade. One day he started talking about unusual investments and how someone he met was going to help him invest. Watched him much closer for a few weeks and realized his mind had slipped to the point where he was very vulnerable to scammers or just making very bad decisions. Thankfully we noticed it soon enough to take precautions.
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Old 01-07-2017, 09:11 AM   #5
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Quote:
Originally Posted by spncity View Post
what is your plan to prevent your financial suicide aided by scammers and other criminals...?
Well, I think having a portfolio that doesn't need a lot of work will help, because I am not used to changing anything in it. Having enough to cover bare bones expenses in my SS, pension, and late life SPIA income streams might help somewhat. Frank is good at detecting scammers and we will help one another as long as we can.

Otherwise, I'm pretty much going to wing it and hope for the best. I know this isn't a magic solution but really, the elderly are vulnerable to this sort of crime and nothing we say here will change that fact.
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Old 01-07-2017, 10:26 AM   #6
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My father was pretty sharp until the end, but over last 10 years was quite open with me and shared his actions with me; I never feared a scam. If he had gotten dementia I'm not sure what would have transpired, he could be quite stubborn on some things. As it was it worked well.

I plan to do same with son. We discuss $ philosophy and investing if not specifics, we're on same wavelength and I have total trust in him. As we age I plan to copy him on taxes and transactions. DW has no interest in any of it so I expect him to become the main FA to her upon my demise. Also have a very trusted DD but her husband is in world of high finance and private equity; I just don't want his less pedestrian philosophy involved in the safety of my or DW's finances.
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Old 01-07-2017, 10:54 AM   #7
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Strategic Simplicity in all things, for one. A very well thought out IPS for another. Annuitization. Regular detailed discussions with my estate's executor is yet another. Highly optimized physical/psychological/emotional health outcomes for yet another. I've already done all these things. "Imperceptible cognitive decilne" is highly person dependent.
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Old 01-07-2017, 10:59 AM   #8
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An investment vehicle that pays monthly is tougher to scam from since the scam must be repeated every month. Annuities, irrevocable trusts, and similar can provide such an income stream while keeping the basis relatively safe from scammers.
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Old 01-07-2017, 11:30 AM   #9
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My mom has early onset Alzheimer's and she is very aware of it, and that it will get worse. She doesn't handle the money, my dad does (with my brother's help) but if she did, I think she would've turned over control to one of us. So while it may be slow, I don't know how imperceptible it really is. Maybe her case is unusual? I guess I'm counting on 1) keeping my portfolio and withdrawals simple, so my mode is mostly set and forget; 2) hopefully no problems of my own; 3) being able to recognize issues early and getting my son more involved; and 4) my son recognizing issues and getting involved.


I've already written up a doc for him on investing and managing finances similar to how I do it, so he should be able to follow that for me if he has to take over or oversee things. I also have a list of all my accounts in my lockbox that he has access to, primarily for when I die but it could also be used for this. As I hit 65 or 70 I'll probably get him more involved.


Not sure what else I could really do? I'm not going to give anyone else power of attorney right now just in case something may happen years from now, or tomorrow in the case of an accident or sudden illness.
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Old 01-07-2017, 11:51 AM   #10
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At the moment I rely on DW to spot any cognitive decline. Although I do most of the day-to-day financial stuff she is very much in the loop so could take over immediately. She did a fine job handing her father's finances and was the one to spot the withdrawal when he was scammed.

For both of us a secondary POA is her nephew but he's two hours away so it might be quite a while before he'd notice anything wrong.
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Old 01-07-2017, 12:19 PM   #11
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Cognitive decline is a very real concern for us if only because of my FIL's actions. He was never scammed, per se, but did begin to make very poor financial decisions. One night, when he was about 68, he sold ALL of his equity holdings. We found out about that from the MIL some time after. Several years later, after MIL died, he bought an annuity after he was diagnosed with stage 4 lung cancer. In the first case, nothing could be done and he was saddled with the losses. In the second, somehow DW found out about it and convinced him to back out during a 30 day window of refusal. In the last case he screwed up his beneficiaries for accounts such that the conditions of his will could not be carried out. All in all, he made a royal mess of things for his family.

I'm not sure just how we could have done anything else because he WOULD NOT discuss finances with anyone except his FA.
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Old 01-07-2017, 01:36 PM   #12
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As DW and I are now in our 80's we're very aware of the decline in physical and mental prowess. For the first time ever, we had to pay a $25 penalty for a late payment (by two days)... Creeping dementia is scary from many aspects, money handling one of them.
We have had general discussions with all of our kids about the subject, but within the next few months, will have a clan meeting to go over the property and money details. In the meantime, along with copies of our will, have consolidated all of the paper and documentation for our possessions.
Stocks
Bonds
Tax returns
Titles... homes, vehicles... motorcycles, golf carts, boats etc.
Bank accounts
Passwords and locations for online information such as genealogy, personal history contacts etc.
Full listing of all billing sources... telephone numbers, accounts, date of contracts

In process.. scanning all pieces of documentation, memberships, credit cards, identifications, legal documents af any kind, for online storage.

Will watch here for more suggestions.
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Old 01-07-2017, 02:05 PM   #13
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DD has the keys to everything. She has the POA and will use it if I start slipping. Right now, that is not in the picture. As I reach mid-seventies I will make sure she has a way to monitor my financial actions. She and her husband are aware of my overall financial state and plans and I have a detailed document describing the nitty-gritty if they need to take over. Maybe I need to look into some way for her to be notified or possibly have her sign off on any transaction over certain limit when I get to an age where such issues are more common.
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Old 01-07-2017, 02:12 PM   #14
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Have not put any thought into this scenario. I'm 53 and DW is 50. I guess I assumes that we both will not become "incompetent" at the same time. There is no Alzheimer or Dementia in our families. More likely we become immobile before loosing our mental state.
DW and I are a couple years older than this but our feelings are the same. We do have adult sons with power of attorney.
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Old 01-07-2017, 02:27 PM   #15
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I'm about 50 and going down quickly. Auto pilot everything and super healthy and smart wife are the the plan for this.
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Old 01-07-2017, 04:11 PM   #16
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We are mulling over this. DSIL #2 is the best one of the bunch to handle this but he is about 30 years younger than we. In another 30 he may need looking after and we plan to be still alive!
My almost 2 year old grandson has learned to count to 10, we may all have to rely on him. It is worrying, for sure
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Old 01-07-2017, 04:15 PM   #17
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When my Mom turned 60 she put me and my sister on her accounts so we could pay bills if needed. She had a few serious illnesses through the years and then we took over paying her bills. Once when she was 84 she spent 13 weeks in the hospital due to doctor error and almost died many times. She asked us to control finances for 6 months after because didn't feel capable. Now at 62 I am giving my stepson all the passwords, etc so he can pay bills if we can't. My son is in charge of our estate. Each of them have different strengths. I would rather be prepared and never need it then have it happen the other way. RB: I am so very sorry about your Mom. My good friend that I am guardian for has the same thing and it is so sad. Her DH died last year so I make all decisions for her.
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Old 01-07-2017, 04:45 PM   #18
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This is an incredibly difficult topic for many of us.

My mom was extremely sharp but she recognized that she wouldn't always be that way. When she was about 80, she made me the co-owner (JTWROS) on all her accounts and announced that from then on I was to handle everything. She kept one credit card (I paid the bill from her account) and simply asked me for cash whenever she wanted some. Fortunately, after my father died I moved mom near me so I could visit her every week to check up on her.

As a child of the Depression she was naturally frugal in everything so her personal expenses didn't amount to much, so that made it easy. Whenever I tried to give her an update on her finances she just laughed and said she had it made since all the worries were on my side.

Gradually, through retirement home, assisted living, and finally memory care, her living expenses increased (nearly $7K a month at the end, about five years ago in a low COL area), but we were lucky enough to handle it OK. Her resources were finally exhausted not long before she died at 96, so it worked out.

But we have no kids to do the same for us, so there is our dilemma.
I make it a point to keep up close friendships with a few much younger guys who are totally reliable, but they have their own families and I don't want to burden them.

The most logical solution seems to be moving to a CCRC at some point, and when I feel the grey matter starting to fade I'll probably enter into some sort of arrangement with a lawyer to handle payments.

I'm hoping that my situation is not uncommon, and that some standardized arrangements will be available when I need it. But my limited research into the topic so far hasn't turned up much.
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Old 01-08-2017, 05:59 AM   #19
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DW and I plan to give my son as the POA sometime in my late 70s. Based on my parents' experience and that of three siblings it is unlikely that I will see much cognitive decline until my mid 80s. But I haven't thought out how to ensure timely hand over if things start going south. Are there a variety of ways to word a POA to enable the designee to take over when he or she believes you are showing signs of decline? What happens if I become stubborn and want to fight the hand off? Is anyone aware of any references on ways to deal with these issues?
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Old 01-08-2017, 07:08 AM   #20
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It's hopefully a long way off for me, but for DM and DG (Grandmother) it's a POA cascade roughly.

DM has POA and access to DG accounts, I keep on eye on DM accounts. Non-financially something similar is set up, only DM has mutual thing set up with her husband (in regards to decisions on healthcare issues).

Since I have no children and likely won't have any I'll probably at some point set up something similar with my brother, and then his children (currently aged 9 and 6 ..) if they are willing to take the responsibility. If not I'll have to work out another solution.
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