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  • #16
    "But I learned that the true day to day financial management was something the banks did not do."
    Actually the best approach is pretty simple. Same as you do in normal life. Auto pay everything possible and use one credit card for purchases.The hard part is the annual stuff like insurance and medicare and SS. Those places don't honor POA. You need to have the person identify themselves and then authorize any phone call.
    Do not try to pay each bill individually. Review the autopay and credit card statement. We kept a "petty cash" envelope for any cash purchases and asked anyone to give a receipt. Not the best, but streamlining as much as possible. The insurance is a PITA too, we ended up simply using a folder. We could find something if needed.

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    • #17
      Originally posted by Tim View Post
      "But I learned that the true day to day financial management was something the banks did not do."
      Actually the best approach is pretty simple. Same as you do in normal life. Auto pay everything possible and use one credit card for purchases.The hard part is the annual stuff like insurance and medicare and SS. Those places don't honor POA. You need to have the person identify themselves and then authorize any phone call.
      Do not try to pay each bill individually. Review the autopay and credit card statement. We kept a "petty cash" envelope for any cash purchases and asked anyone to give a receipt. Not the best, but streamlining as much as possible. The insurance is a PITA too, we ended up simply using a folder. We could find something if needed.
      Auto pay does not solve the problem. Someone has to look at the bills.
      We have our annual insurance bills on autopay.
      For the person I helped, we had SS go directly to the bank account and Medicare premiums were taken out of the SS check.
      But how does one know that the credit card bills are correct? Who decides whether the insurance is appropriate and properly priced? That is the sort of thing that requires an attentive family member. If there is another solution, I would love to know what it is is.

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      • #18
        Originally posted by afan View Post
        The real issue is harder to solve if your kids are not the right people. You can hire an hourly-fee, advice-only planner for advice. You can turn custody of assets over to a bank trust department and have them invest the assets in the low cost index funds your adviser chooses. You can set up your taxes as your CPA instructs and check in with your estate planning attorney to see whether changes in tax laws affect you.

        But you need someone to do the very mundane things like pay the bills.

        Switch to non-owned auto coverage when you give up your cars, everyday stuff that is easy but that, in general, banks will not do.

        You also need someone who knows the overall situation. "Grandpa is headed for a nursing home, so we need enough cash to buy in now and pay the monthly bills until the house sells. Then invest the proceeds to generate reliable cash flow."

        When I helped out an elderly person who was losing the ability to manage for themselves, this was the work.

        Managing the investments was trivial. I initially looked at trust companies to do it. The price was absurd for what little there was to do. Plus, except for Vanguard, they all wanted to regale me with the brilliance of their active managers. That they seemed genuinely unaware of the evidence against it was scary. The taxable holdings were largely frozen by capital gains anyway. I did some rearranging of retirement account holdings, but their life would have been fine if I had not.

        But I learned that the true day to day financial management was something the banks did not do. As trustee I was able to do it, but I do not know what I would have done for them if I lost the ability to handle it.

        I still do not have a solution for that problem. Happy to hear what people suggest.

        I agree that if there is asymmetry in who handles the finances, then the non-financial spouse should do the talking and ask the questions when they meet with any of the advisers. The finance hobbyist should keep quiet and listen. Perhaps follow up later if needed. The goal is to get the non-finance person informed and comfortable with the plan.

        That extra time will cost more money but it will be worth it.
        You are describing a professional “Daily Money Manager” or “DMM”. This article has a good summary of what they do, although I disagree with the hourly rates - I have never heard of any charging that much. Worth looking into for an elderly relative who can no longer handle bill-paying, etc, especially if you fear they may fall prey to a scammer.
        Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #19
          Originally posted by afan View Post

          Auto pay does not solve the problem. Someone has to look at the bills.
          Some one has to review either the credit card and checking. You set up the autopays and should become familiar with the amounts. The same way I review mine. I know where we shop. If I have a question or an unusual item by someone else I know who has the card. I ask.
          Wle have our annual insurance bills on autopay.
          For the person I helped, we had SS go directly to the bank account and Medicare premiums were taken out of the SS check.
          Of course. Supplemental does not come out of the check. You can have medicare and part D directly deducted. The pain is if you need to deal directly with medicare and of social security by phone.
          But how does one know that the credit card bills are correct?
          Who has the card or are they autopay? See your first question.
          Who decides whether the insurance is appropriate and properly priced? Not everyone has an attentive family member. Whoever gets stuck getting quotes.
          That is the sort of thing that requires an attentive family member. Not everyone has an attentive family member.
          If there is another solution, I would love to know what it is is.
          It takes time getting quotes and info for things like insurance etc. We have done that and inform the person of the answer and file stuff away. It is not paying the bills that is the problem, It is getting the quotes and doing the "shopping". It is getting the new insurance policy that takes the time. As you said, it is on autopay any way.

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          • #20
            Congratulations on your success. I think your problem is one that all of us early career docs wish to have.

            So, tell us about your secret to building wealth.

            I’m guessing you were just scraping by paycheck to paycheck and then you put your IRA into Bitcoin and now are sitting pretty?

            Comment


            • #21
              This is from California Department of Consumer Affairs regarding the function of professional fiduciary. It sounds less financial advising, but rather to run day to day functions when I am incapacitated, in coordination with other professionals. I am wondering if any of us here have experience or recommendation.

              "Professional fiduciaries provide critical services to seniors, persons with disabilities, and children. They manage matters for clients including daily care, housing and medical needs, and also offer financial management services ranging from basic bill paying to estate and investment management."

              Here is the related Business and Professions Code:
              https://www.fiduciary.ca.gov/laws_regs/act.shtml

              Comment


              • #22
                Originally posted by jfoxcpacfp View Post

                You are describing a professional “Daily Money Manager” or “DMM”. This article has a good summary of what they do, although I disagree with the hourly rates - I have never heard of any charging that much. Worth looking into for an elderly relative who can no longer handle bill-paying, etc, especially if you fear they may fall prey to a scammer.
                Good suggestion. Still not clear the extent to which they will manage the financial affairs but could be helpful. They might pay the bills but would they ask why grandma is buying annuities? The brief description suggests that they would still need an involved family member for oversight. Or a POA, with the power and obligations that come with it.

                When I was helping someone there was a time when they were still out and about, spending money with their own credit cards. Unfortunately, they were not paying the bills although there was plenty of money. They were also making some bad decisions about what to buy. I had to take over and distinguish legitimate purchases from attempts to cheat the older person. That required several cancelled transactions for example. I also had to consolidate multiple banking and brokerage accounts.

                Not clear how much of this a daily money manager would do. This is not something I would want an individual financial planner doing. I would trust a bank or trust company to do it, but apparently that would be an expensive extraordinary service, if they would do it at all.

                I did get a referral to one big bank. The person who suggested it worked for the trust department but not in that particular part of the business. They said the bank would do it, for costs on top of its high regular fees for serving as trustee. As best I could tell, the minimum trust size would rule out the vast majority of people across the country.

                Strange that the most important work is almost impossible to farm out, while the easy stuff like asset management, finds lots of places that will charge high prices to do almost nothing.

                To be clear- I am talking about people who either
                1. Do not have a family member who can do the job for them

                Or
                2. Have an involved family member but want to minimize the burden on that person.

                Comment


                • #23
                  Originally posted by afan View Post

                  Good suggestion. Still not clear the extent to which they will manage the financial affairs but could be helpful. They might pay the bills but would they ask why grandma is buying annuities? The brief description suggests that they would still need an involved family member for oversight. Or a POA, with the power and obligations that come with it.

                  When I was helping someone there was a time when they were still out and about, spending money with their own credit cards. Unfortunately, they were not paying the bills although there was plenty of money. They were also making some bad decisions about what to buy. I had to take over and distinguish legitimate purchases from attempts to cheat the older person. That required several cancelled transactions for example. I also had to consolidate multiple banking and brokerage accounts.

                  Not clear how much of this a daily money manager would do. This is not something I would want an individual financial planner doing. I would trust a bank or trust company to do it, but apparently that would be an expensive extraordinary service, if they would do it at all.

                  I did get a referral to one big bank. The person who suggested it worked for the trust department but not in that particular part of the business. They said the bank would do it, for costs on top of its high regular fees for serving as trustee. As best I could tell, the minimum trust size would rule out the vast majority of people across the country.

                  Strange that the most important work is almost impossible to farm out, while the easy stuff like asset management, finds lots of places that will charge high prices to do almost nothing.

                  To be clear- I am talking about people who either
                  1. Do not have a family member who can do the job for them

                  Or
                  2. Have an involved family member but want to minimize the burden on that person.
                  >>When I helped out an elderly person who was losing the ability to manage for themselves, this was the work.

                  Managing the investments was trivial. I initially looked at trust companies to do it. The price was absurd for what little there was to do. Plus, except for Vanguard, they all wanted to regale me with the brilliance of their active managers. That they seemed genuinely unaware of the evidence against it was scary. The taxable holdings were largely frozen by capital gains anyway. I did some rearranging of retirement account holdings, but their life would have been fine if I had not.

                  But I learned that the true day to day financial management was something the banks did not do. As trustee I was able to do it, but I do not know what I would have done for them if I lost the ability to handle it.

                  I still do not have a solution for that problem. Happy to hear what people suggest.<<

                  Just serving up a suggestion, as asked. This was not meant to be a OSFA response, just a tool for folks to add to their toolbox. Unfortunately, I can’t fix everything for everybody 🤷‍♀️.
                  Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                  Comment


                  • #24
                    Right.

                    I think the issue I raise is becoming more common. We are lucky to have responsible heirs who can do the job. But they have busy lives and we want to minimize the work for them should the need arise. For those without next generation family members to take over, this is the big problem.

                    Comment


                    • #25
                      Originally posted by afan View Post
                      Right.

                      I think the issue I raise is becoming more common. We are lucky to have responsible heirs who can do the job. But they have busy lives and we want to minimize the work for them should the need arise. For those without next generation family members to take over, this is the big problem.
                      Just as adult supervision is needed from cradle to self sufficiency, the path is simply reversed when adults need supervision. Physically and mentally there is a need, it may decline to 24/7 complete dependency. Parental responsibility has alot in common with responsibility for a parent. The path is just reversed.
                      No child is the same, but the second is easier. Same for parents, it is going to come.

                      Comment


                      • #26
                        OK. But how does that help those who do not have involved children? Not everyone is so lucky.

                        Comment


                        • #27
                          Originally posted by Hatton View Post
                          I am interested in the responses to this thread. I am 64 and have a networth just shy of 11 million. I have not started doing RMDs or QCDs but I know you can automate RMDs at Vanguard. Not sure on QCDs. I will likely do QCDs as well. Your financial affairs sound very organized. I am not sure what a financial advisor would add at this point. If you feel your mental acuity is slipping then that is another story. You might consider interviewing advisors who charge on a hourly basis to establish a person to help your spouse if you become incapacitated. David Graham at FiPhysician is one such person and Johanna Fox Turner is another. Both post here.
                          I am the spouse of a high earning physician who does not want to be part of the day to day money decisions. NW $8M 50yo, no plans for spouse to retire. I am the money manager. We met with David Graham this month as we were hitting a milestone "goals achieved" and kids becoming adults. The money spent talking to David over zoom was well worth it. He met with both of us and then with just me. I plan to have a chat with him at least twice a year going forward. I learned some things I didn't realize and he gave us permission to loosen the purse strings a little bit. (David if you are reading this, I'm going to give up my Honda with 170k miles, we ordered a new car).

                          Consider this an endorsement for his ability to put things in perspective. He advocates keeping things simple from an investment standpoint and enjoy what you have. I believe he would have some common sense advice for your spouse and reassurance for you. 5 stars.

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