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Did you change your mind?
Or, did your mind change?
How can you tell?
You can’t.

That makes us vulnerable not only to scams but to our own minds playing tricks on us. The person we have named as an agent under our Durable Power of Attorney or successor trustee in our Revocable Living Trust begins to pale by comparison with the prodigal son or daughter. A new-found friend or a relative who does not see us day to day seems to have a better handle on reality than a long term advisor who tells us it is time to give up the car keys or, worse yet, time to leave home.

How do we protect ourselves from our changing minds?

By acting before they change.

One way to protect against the blandishments of QVC, the jewelry channel, sweetheart scams, and “borrowing” children and grandchildren is to set aside at least some of the money which we will need for our care in a trust which benefits us but which we do not control. In addition to a trustee and a trust protector or trust advisory committee, the trust could recommend that the Certified Financial Planner or Registered Investment Advisor with whom we have worked for years continue to manage our investments. We could arrange to transfer increasing percentages of our investments to that trust as we age and to protect against our mind play tricks on us – or lose energy and interest in managing our investments.

Some people think that a revocable living trust will be enough: that when a doctor or two writes that we are mental incompetent to manage our financial affairs, our successor trustee will take over and all will be well. That approach has several pitfalls.

  1. We can revoke the trust, tear it up – or we can make a mistake in changing or in keeping the person we named as successor trustee.
  2. A physician may be unwilling to prepare a letter addressing our mental state, knowing that it will affect the patient-doctor relationship. Or physicians may disagree. Everyone has their good days and their bad days.
  3. That still leaves all our eggs in one basket.

Why not have three buckets?

  • One for regular income for regular expenses.
  • One which we can change.
  • One which we cannot.

The third is like an insurance policy. Whether or not we have long-term care insurance and whether or not the insurance policy pays; whether or not our mind changes and whether or not we change our mind, it will be there to meet our needs.

 

Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.

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