For many people, the holidays are a particularly lonely period. But the fact is, loneliness is an all too common issue for a large number of our friends and neighbors, particularly seniors: one-third of Americans over the age of 65, and half of those over 85, live alone. And the consequences of social isolation for older adults are particularly acute. For example, loneliness can significantly speed cognitive decline in seniors and individuals who suffer from loneliness are twice as likely to die prematurely than those with higher levels of social interaction.
While loneliness in older adults has many causes, a common one is that seniors are consumed with worry over their financial and living situation. And high stress levels contribute to depression, a condition that saps us of our desire to enjoy the people and activities that bring us joy. With a bit of planning, however, you can establish a support system that will ensure your security and wellbeing, leaving you to focus on getting the most out of life. Here are some ideas:
Draft a Power of Attorney and Name a Healthcare Surrogate
If a time comes when you’re unable to fully manage your affairs, or make sound decisions regarding your medical care, it’s important to have someone you trust providing assistance. Thankfully, you can select who will have the legal authority to represent your interests by completing a Power of Attorney and a Healthcare Advanced Directive. Typically, a Power of Attorney empowers a person of your choosing (known as an agent) to handle your financial and business affairs while an Advanced Healthcare Directive allows you to (among other things) appoint a healthcare surrogate who will make medical decision on your behalf.
While these documents offer a range of benefits, there may be none bigger than avoiding guardianship. Guardianship is the process where a court appoints a guardian for an individual (called a ward) who is unable to manage all or part of their daily affairs. The guardian, often chosen by the court and who the ward doesn’t know, is empowered to make financial and personal decisions on the ward’s behalf. While guardianship is intended to be benign, it often is anything but: seniors with no one to advocate for them may find themselves thrust into a humiliating, nightmarish scenario where a court-appointed guardian, whom the ward is unfamiliar with, begins to sell off the wards’s assets in an effort to pay for the ward’s care.
Given the potential consequences of failing to name an agent and healthcare surrogate, if you have no immediate family whom you would feel comfortable choosing to assist you, consider a good friend or trusted advisor, such as an attorney or accountant. Regardless of who you select, the key is to create detailed instructions regarding how you’d like your agent or healthcare surrogate to act on your behalf. Also, before finalizing your wishes, it’s a good idea to sit down with a professional, such as a seasoned estate planning attorney. Not only will they ensure you’ve complied with all legal requirements but they can also draw from their experience to suggest potential scenarios that you may not have considered.
Establish a Living Trust
While drafting a Power of Attorney and naming a healthcare surrogate are important for everyone, establishing a living trust can be the best solution for ensuring your wellbeing during your later years. A living trust is a legal entity that can manage your assets during your lifetime and transfer those assets to your chosen beneficiaries once you pass away. As the creator (or settlor) of the trust, you set the trust’s operating rules and select who will serve as the trust’s manager, known as the trustee. And your trustee is legally obligated to oversee the trust in accordance with your wishes.
While a living trust is an excellent way to ensure you’re provided for during your lifetime, paying your bills and wisely investing your assets, it also has another major benefit: it can function like a contract between you and your assistants and caregivers. Specifically, the terms of the trust can set the conditions for how they will be compensated for their help. For example, you can choose to name these individuals as heirs to your estate and if they do not act in your best interests, in the manner you’ve chosen, then they will not receive their inheritance.
Needless to say, selecting the right trustee to manage your trust is a critical decision. If you can’t think of a suitable trustee, one potential solution is to name an institutional fiduciary. Most banks and financial institutions have a trust department that manages the trust accounts of their clients. Institutional fiduciaries will manage your trust in an impartial, by-the-book manner and, since they must be licensed and insured, state and federal regulators hold institutional fiduciaries to a high standard.
There are other tools and legal techniques that one can use to oversee the conduct of the trustee and other fiduciaries named in your estate plan. Those tools may prove very helpful to ensure that the people you trust, in fact, follow your instructions.
Trust Protector: A trust protector is an independent third-party that is given certain powers and duties regarding a trust. Generally speaking, a trust protector acts as a representative of the trust’s creator, overseeing the trustee’s decisions. The trust protector is also typically empowered to take specific actions to ensure the trustee is acting in accordance with the terms of the trust. Think of a trust protector as another set of eyes looking out for your best interest.
Geriatric Care Manager: Geriatric Care Managers can be a lifesaver for elderly individuals and their loved ones. Trained across a range of disciplines, Care Managers help senior citizens plan, coordinate, and access vital services, along with acting as advocates for their clients. Essentially, Care Managers are “insiders” who understand the healthcare system and work directly with elderly clients to best navigate it. Care Managers also serve as objective observers and intermediaries between seniors and their families, healthcare surrogates, and other important relations. Care Manager’s can also help you combat loneliness, suggesting social services and events to keep you engaged with the community.
Loneliness is a complicated problem and the right solution varies from person to person. There are concrete steps you can take, however, to ensure your needs are met and that there are a number of people and institutions looking out for you. The piece of mind that comes with having a comprehensive estate plan in place will go a long way towards eliminating a number of major worries and concerns, leaving you to enjoy the people and activities that mean the most to you.