Are you a solo ager, or in some circles, an “elder orphan”? A solo ager is typically defined as a single, childless baby-boomer. Yet, a boomer may have children, but with whom there is no relationship, or in many cases, children who are simply pre-occupied with their own affairs. While it is likely that you are unfamiliar with these artful terms, in fact, you may already be a solo ager and there is an increasing number of boomers who likely will become solo agers as well. Odds are that everyone, whether having a partner or not, may become a solo-ager at some point.
Solo agers face many challenges, but the underlying common denominator is that solo agers often lack a support system to assist in the management of their health, legal and financial affairs. Despite these challenges, there are several, impactful recommendations that should be considered to thwart the unintended consequences of a solo ager lifestyle.
Execute a Power of Attorney
A power of attorney grants another person (an “agent”) the authority to handle your financial affairs. I frequently explain to my clients that one of the most important documents I can prepare is a power of attorney. Failure to have this simple document may necessitate a guardianship proceeding, which is costly and burdensome.
On December 15th, 2020, Governor Cuomo signed into law, legislation significantly changing the New York General Obligations Law which governs powers of attorney. Effective June 15th, 2021, the new law simplifies what has proved to be an overly cumbersome form. While the form has been simplified, the key to a properly drafted power of attorney lies in the modifications added by an elder law attorney. Reliance on the statutory form is improper as it does not contain very impactful modifications, such as the authority to move your assets for planning purposes.
Consider a Revocable Trust
A revocable trust is an efficient and effective tool that can be utilized for asset management, asset protection, and estate planning purposes. There are many advantages to creating a revocable trust. First, a revocable trust ensures the continuous management of your assets if, unfortunately, you become physically or mentally disabled. After drafting a revocable trust, you then transfer your assets to your trust. Under the terms of the trust, if you cannot serve as trustee, you appoint a successor trustee. This provides for the orderly transition of the management of your assets.
Another advantage to creating a revocable trust is the avoidance of probate. In the case of a solo ager, the probate process can be quite exhausting since there may be no descendants. In these cases, New York Law requires us to contact distant relatives and, in some instances, a genealogist might be necessary. A revocable trust avoids this hassle.
Designate Someone to Make Your Medical Decisions
New York Law allows you to sign a health care proxy appointing an agent to make your medical decisions. An agent’s authority under a health care proxy is only effective if you cannot make your own medical decisions. I recommend that you have intimate discussions with your health care agent regarding your health care wishes.
Pre-Plan Your Funeral and Designate Someone to Dispose of Your Remains
If you have specific wishes regarding your burial, you should consider planning and funding your funeral to ensure your wishes are carried out. Moreover, you may want to complete a burial remains form expressing your desire to not be embalmed or to be cremated. If you intend to donate your organs for scientific research, this is a good place for that as well, but I would also recommend registering as an organ donor and notifying the organization you intend to benefit.
Create a Team of Professional Advisors
Professional advisors exist in many areas in part because it is nearly impossible to know everything about everything. One issue we often see are clients who are proficient at preparing their own income tax returns or self-directing their own investments, but do not account for changed circumstances, for instance, their incapacity. If you lose your capacity, those trying to assist you must first go on a fishing expedition to understand the breadth of your financial affairs to provide competent assistance. It is advisable to form relationships with other professionals such as attorneys, accountants, and financial planners early in life, so that you do not burden others.