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Consider complexities of growing old solo

Consider complexities of growing old solo
(Dreamstime)

The Baby Boom generation is getting a new nickname: the Loneliest Generation. About one in 11 Americans age 50 and older lacks a spouse, partner or living child, according to a recent report in the Wall Street Journal.

"That amounts to about 8 million people in the U.S. without close kin," the Journal reported, and their share of the population is projected to grow.

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Many of them have reached out to me, especially women, who have a longer life expectancy than men do. Without a close living relative, they face complexities. Here are some of the issues:

Health-care power of attorney: What happens if you cannot make your own health-care decisions? You may have trusted friends, but as you age, so will they. That makes it possible that they won't be around or won't be able to make decisions when you need them most.

When giving a person health-care power of attorney, it's important to choose wisely, because you may create incentives for that person to make the wrong decisions.

If you are close enough to give this person health-care power of attorney, you probably also have decided to leave some of your assets for him or her when you die. Yes, this is cynical, but it's important to consider such matters.

Choose wisely.

Living will: This is the document that gives your instructions about denying extraordinary medical procedures to save your life. You should give a copy to your physician — and if you live alone, keep a folder of important documents and phone numbers in an accessible place in case of emergency.

Estate plans: This is the moment you confront your estate plan: your will and/or revocable living trust. With a will, you must name an executor, the person who will take your assets through the court-ordered process of probate, which changes title to your assets.

The difficulty of this process is why it's preferable to create a revocable living trust and rename your major assets in the name of the trust (your home and bank CDs, but not your IRA, which has a beneficiary). You will name a successor trustee to carry out your wishes for distribution after your death — without going through probate.

The attorney who creates your estate plan will likely be willing to serve as executor for your will — and charge a fee to the estate for the probate process. But who will serve as your successor trustee for your RLT, to distribute your property? It could be the same person you trust with your health-care power of attorney, if you are confident in that decision.

Assisted living: It's painful to leave a home and neighborhood, but I urge people to move into an assisted living facility while they are still able to socialize and make new friends. A small amount of long-term care insurance can help make this transition financially feasible.

Pets and property: If you have no obvious heirs, you should make advance plans for distribution of any remaining property — perhaps to a charitable institution that will put the proceeds to good use.

Don't forget a plan for your pets. Check with your local no-kill animal shelter to see if they have a legacy plan and leave instructions that it is to receive your pets if you can no longer care for them.

Make a solid plan for solo aging and don't let these questions fester for too long. And that's The Savage Truth.

Terry Savage is a registered investment adviser and the author of four best-selling books, including "The Savage Truth on Money." She responds to questions on her blog at TerrySavage.com.

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