A widow of moderate means, Marjorie realized she had no one to supervise her financial and physical well-being if she became incapacitated. She wisely established a living trust as a means of ensuring quality care in her later years. Initially, the trustee managed Marjorie’s trust assets (which grew considerably over the years) while Marjorie managed her income and expenses. However, as her health and memory began to fail, the trustee began to monitor her personal situation more closely.
When it became obvious that her living conditions were not appropriate for her increasing physical needs, the trustee 1) encouraged her to recognize her physical imitations, 2) assisted her in selecting a retirement community, 3) helped her reallocate her resources to pay for her new home, 4) helped her plan for increased expenses in the future, and 5) facilitated her move to her new residence. Marjorie enjoyed her new home and maintained an active lifestyle for several years.
As her health and cognitive ability deteriorated further, the trustee again intervened and helped Marjorie recognize her need for daily living assistance. At this point, the trustee assumed responsibility for payment of her expenses and receipt of income. The trustee also worked with caregivers to coordinate her medical care and living assistance, and made sure Marjorie had the little extras that would make her life safer and more pleasant. In situations of memory loss, there is always the potential for assets to “fall through the cracks.” However, because the trustee was familiar with all of Marjorie’s financial information, the trustee could utilize all her resources for her benefit. This included identifying a forgotten safety deposit box, reconciling assets in her personal bank accounts, reviewing and rectifying erroneous bills, and monitoring health insurance benefits. The most striking example of the benefit of having a trustee was the trustee’s claim on her behalf for long-term healthcare benefits which netted over $131,000 to her. Because of her memory loss, Marjorie was completely unaware that she had purchased the policy and hence, would not have made a claim. With the help of a professional trustee, Marjorie:
- Realized the growth of her assets through sound financial management,
- Received the care she needed as her health and cognitive ability deteriorated,
- Guarded her assets when she was financially incapacitated, and
- Provided for her eventual beneficiary while avoiding probate
Because of her foresight in planning for her incapacity, Marjorie’s financial affairs are in good order and she is happy and well cared for in her declining years.