This column first appeared in the San Antonio Express-News on May 2, 2016.
When you are alone, your options include:
> The Money Management Program, a volunteer organization run locally by Catholic Charities and funded partially by the taxpayers. To qualify, you must be 55 or older, live in Bexar County, and be low income. A volunteer will be arranged to help with a budget and to help pay bills. Clearly this is limited and does not meet all the needs presented, nor is everyone able to use this service.
> Calling upon an Accountant. You can ask your CPA or other accounting professional if their office provides a bill paying service. They would charge a fee for their service, and it would very likely not include helping in the event of a medical crisis.
> Guardianship. If you make no plans at all, when you become disabled the courts may appoint a volunteer Guardian. You do not want this to happen, as it is expensive and you will never have met the person who becomes your Guardian.
> Using a Bank Trust Department with a fully funded Living Trust or with a Standby Trust arrangement. With a Standby Trust your attorney helps by drafting a Trust and a Power of Attorney. The Trust remains “unfunded,” receiving only a token amount of money so it can exist legally. You give the Power of Attorney and Trust to the bank with instructions to gather the rest of your assets together if you become disabled. The bank has no powers while you are well. If you are disabled, the bank must act quickly to provide you with assistance.
If you become disabled, then you must have someone who will contact the bank, but the bank will handle the details of your finances. If you pass away before the bank has time to gather your assets, then your Will must go to probate. This is not an ideal solution, but it is a workable solution for those who are alone and have adequate financial resources to pay the bank’s fee.
A fully funded Living Trust, on the other hand, becomes owner of all your assets when you create it. You give it title to your home, your savings and your investments. You name yourself as manager of the assets, and the bank as alternate. They wait to charge a fee until you are disabled. However, when they do take over, the Living Trust already possesses your resources. If the fully funded Living Trust is established correctly, care is provided to you and probate is avoided. As such, I generally recommend fully funded living trusts instead of standby trusts.
Medical decision-making is much more difficult to delegate when you are alone. Your doctor cannot be appointed as your medical decision-maker as there is a conflict of interest. A bank or an accountant will not, generally, agree to be your medical surrogate. You may, however, feel more open to asking friends to take this duty as you will have already made other arrangements for your financial management. Your friends would not be handling your money, just communicating your medical preferences to your physician.