By Rick Waechter, Founder

We work with multiple clients in their 80s – and even a couple who are in their 90s. Our oldest client will turn 100 next year. Remarkable.

We’ve been fortunate enough to advise older clients who have organized their financial lives well, and who have known when to rely on the next generation for important decisions. Their kids are lucky. They can worry a lot less about their parents losing money through scams. They will have a far easier time settling their parents’ estate after death. And they’ll know in advance of risks that their parents could run low on funds for basic living expenses or health care needs.

Sadly, we have also worked with clients who have not known when to let go, or whose financial situations are so complex that helping them requires a forensic detective and the patience of Job. Their kids are stuck and, understandably, resentful.

If you are 75+, there are basic steps you should take, or be ready to take, before your mental capacity begins to falter. This list is not long. It is not complicated. It only requires a commitment of time, self-awareness, and courage. In other words, anyone can follow it.

• Identify a child or very close friend who will manage your finances when you cannot and who will handle your estate when you die. We’ll call them your CFO. Even if you are sure your spouse will outlive you and be able to handle all this – assuming you are married – you should have your CFO at-the-ready. They should be the executor of your will, successor trustee and agent on financial power of attorney – or the person who replaces your spouse in those roles if your spouse cannot serve.
• Make sure your CFO understands your financial situation thoroughly and knows what to do. If you have several kids, you’ll need to make the tough decision and appoint one person as CFO. Other children can play other roles like health care agent or chief negotiator in determining who gets what personal possessions. If you like, all your kids can be in the loop. But only one should be the CFO.
• Periodically ask your spouse and your CFO for an honest assessment of your abilities – and take their advice. When they tell you it’s time to let them handle your finances, follow their advice. It will likely happen gradually, which will make the transition easier. I’m not naïve. I know it’s hard. But it’s one of the wisest decisions you will ever make.
• Before it’s too late, declutter your finances. I mean moving all your investment accounts to one custodian and selling investments that are troublesome to manage (think rental properties or private investments).
• Make sure your estate planning documents reflect your wishes. Key decisions include who inherits your assets and when they get them. The “who” may include children, grandchildren, non-profits or close friends. Remember: these documents are legally binding. It doesn’t matter if you told your kids that you wanted a particular charity to receive a gift if that gift is not memorialized, in writing, in your last will or trust.

For many, this is a challenge. I suspect it will be hard for me when I am of a certain age. But the alternative is sub-optimal financial decisions – or worse – and frustration for everyone involved. That’s not the legacy anyone should leave.