A lesson from ‘Home and Away’ - Sunset Planning
Let me firstly start of by saying I am not a regular watcher of ‘Home and Away’ …. however, part of the episode I saw last night prompted me to take this action…
In the episode, there was a situation where a Grandfather had passed away recently and the next thing the surviving family knows is that the local bank manager has taken possession of the farm. It became apparant that the family were not aware of the high debts the grandfather had incurred and were quite distressed at the imminent prospect of losing access to precious belongings and family memories.
A lesson if one can be taken from such a dramatic tragedy (which unfortunately happens far too regularly in the real world) is that: “with a little planning and communication, personal tragedy need not lead to financial disaster for those you leave behind”.
Financial planning focuses on goals and objectives while clients are living. Estate planning focuses on after-death goals and objectives. And then there is a wedge of time in between the two – a purgatory if you will – that may increasingly require planning and expertise.
The period of life we are talking about is the period in peoples’ lives where, because of advancing age, they may not be able to completely control their own affairs. A term being increasingly used to describe this period is sunset planning.
This period may include the onset of dementia, declining physical health, or the inability to make decisions for fear of making the wrong ones or getting taken advantage of.
Many of us will have been touched in some way by a family member or friend in this position. “You don’t know how awful it is until you’ve been through it,” a colleague of mine recently commented after sharing a challenging time from a business perspective and a trying time for him personally. “And once you have, you appreciate the value of planning for such a period in a person’s life.”
What would be four key services which would be worthwhile value:
- Promote Communications. “Nobody talks about this period, and that’s a big problem,” said my colleague. “The 70-year-old doesn’t talk to their 40-year-old kids, and the 90-year-old does not talk to their 70-year-old children.” As a result, nobody knows what anyone’s wishes are when another family member has to take over.” As a planner, we can be the catalyst for this communication, generally in the form of a multi-generational family meeting. The meeting need not be in person, and may in fact be easier if it were not. A large family conference call will do. It’s important to get out on the table each family member’s desires in terms of housing, health care, and who is responsible for whose affairs once they can no longer make decisions for themselves. Most importantly the discussion needs to be documented.
- Plan Finances. Once you know what your clients’ expectations and desires would be for housing and health-care options, it is appropriate to use these facts to see if their assets will support their desires. From food service through to the portions of care that Medicare will pay, a detailed analysis of whether your client has the wherewithal to get what they want, and either help them make the changes to get there, or help them modify their expectations.
- Establish Powers of Attorney. You need to ensure your clients have established a durable power of attorney that enables a third party to make financial decisions for them. Equally important, you need to ensure they have established a health-care power of attorney that enables a third party to make health-care decisions for them, such as whether or not to resuscitate or discontinue life support services. It is vitally important to seek appropriate legal advice in this regard and equally important to ensure there is no major conflicts between financial, medical and health care directives.
- Establish Electronic Vaults. Electronic vaults enable you to utilise and access important documents while ensuring all the important documents are located in a single location. One of the most challenging aspects of helping individuals who have entered a sunset period, is knowing where all the important documents are. If you’ve ever walked into someone’s house who’s had Alzheimer’s and tried to find their bank statements, insurance policies, and medical records, you will immediately appreciate the value of setting these documents aside ahead of time.
If this is an area you would like to explore in more detail, please contact us.