For older adults, aging without immediate family support, and managing personal finances alone can be especially challenging. Solo-agers often navigate rising medical costs, declining mobility and increasing complexity in financial decisions without a trusted partner to assist. Not only are the financial decisions hard, but the increasing technology needed to access accounts and communicate with service reps, can be overwhelming per Beck, Lenox & Stolzer Estate Planning and Elder Law. That’s why building a strong financial support system and legal framework is essential. So, what to do when solo-agers need help managing finances?
Identify Trusted People for Support
The first step is deciding who can step in to help if you’re ever unable to manage your finances. This may be a close friend, a younger relative, or even a professional fiduciary. Solo-agers should choose someone trustworthy and financially responsible, not necessarily a family member, to serve in this role.
Once you’ve selected a potential helper, discuss your expectations with them. Discuss how you want your money handled, what matters most to you and where your financial records are stored. Open communication now can prevent confusion and errors later.
Set Up Proper Legal Authority
Even if you trust someone, they need legal authority to act on your behalf. A durable financial power of attorney allows your designated agent to manage your finances if you’re incapacitated. This includes paying bills, accessing bank accounts and managing investments.
Without this document, loved ones may have to go to court to get control over your finances, which can be expensive and time-consuming. A lawyer can help you draft a power of attorney that reflects your wishes and complies with your state’s laws.
You may also want to consider naming a successor trustee if you have a living trust. This person would step in to manage your trust assets if you’re unable to do so yourself.
Organize Your Financial Information
Solo-agers should create a master list of accounts, passwords, insurance policies and key contacts. This list should be updated regularly and stored securely with your attorney, in a locked drawer, or with a secure digital service.
Ensure that your estate planning documents (will, trust and powers of attorney) are complete and readily accessible. Without proper documentation, your assets may be delayed or mismanaged in the event of illness or death.
Use Tools that Provide Oversight and Security
Consider financial management tools that provide transparency. For example, some banks and credit unions offer account monitoring features that can alert a trusted contact to suspicious activity.
Hiring a daily money manager, especially if you struggle with bills or paperwork, can also help. These professionals assist with routine tasks, such as organizing statements, paying bills and setting budgets. Beck, Lenox & Stolzer can provide referrals to you for trusted daily money managers.
For complex portfolios or retirement distributions, a financial advisor with fiduciary responsibility can be a valuable part of your support team. Be sure to vet any advisor’s credentials thoroughly. Our attorneys also have referrals for financial advisors as well.
Plan for Future Needs Now
Solo-agers face an increased risk of financial exploitation, especially in later stages of life. Planning reduces vulnerability and ensures that your money continues to support your values and needs.
Waiting until a crisis strikes can leave you with fewer options. By putting a plan in place now, you remain in control, even if your health or cognition declines later. Schedule a consultation today to start the process.
Key Takeaways
- Choose a reliable financial advocate: Solo agers should designate a trustworthy person or professional to help manage their finances, if needed.
- Grant legal authority with power of attorney: A durable financial power of attorney ensures your advocate can act on your behalf during incapacity.
- Keep financial records organized: Maintain a secure, up-to-date list of accounts, contacts and documents for easy access in emergencies.
- Use professional help when necessary: Daily money managers and fiduciary advisors can offer accountability and reduce financial stress.
- Plan early to stay in control: Financial planning before a crisis preserves independence and protects against exploitation.
Reference: AARP (Dec. 13, 2019) “How to Financially Prepare for Solo Aging”
