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A Retirement Puzzle: Turning Over Control of Your Money

A Retirement Puzzle: Turning Over Control of Your Money

His father’s assets dwindled precipitously with the onset of his cognitive decline. Mr. Appel said his father had paid two months of a friend’s rent when he could scarcely afford to and spent large amounts of cash. Mr. Appel was unable to stop the bleeding, even after he got a lawyer involved.

“I was told it was technically his account and I couldn’t prevent access to it,” he said.

What can you do if you don’t have someone to turn to? Finding a professional fiduciary is an option. Fiduciaries are agents who are licensed and regulated by states to handle a variety of money management tasks and assist with financial decisions. To find one, he suggests asking your lawyer or financial planner for recommendations.

“Otherwise, you can do a local search and interview multiple firms to see who may be a good fit,” he said. Fiduciaries may charge between $100 and $250 an hour, he said.

Mr. Appel also recommends these steps to pave the way for relinquishing control.

Start talking about it early. Explain the state of your finances, where accounts are, your sources of income, your debts and what bills are paid from which accounts. Disclosing this information before cognitive impairment surfaces gives a trusted person a wider window of opportunity to honor your wishes, he said.

Prepare important legal documents as soon as possible. These include a will or trust, a power of attorney for finances, a power of attorney for health care and an advanced directive.

Freeze your credit reports by contacting the three credit bureaus, Equifax, Experian and TransUnion. Freezing your credit makes it more difficult for people to take out loans or open credit cards in your name and lowers the risk of exploitation.

Involve people you trust, like a relative or a fiduciary, early on. Take a financial inventory; list your accounts and where the title to your home or car is. List your debts (such as credit cards and mortgages), and provide insurance policy information as well as the names of an estate planning attorney, financial planner and accountants.

Block solicitations, including commercial mail solicitations and robocalls. Silence phone calls from unknown numbers. You can stop commercial mail solicitations by signing up at dmachoice.org; the service costs $4 for 10 years. The site even has a “do not contact” list where caregivers can register a loved one’s name. You can opt out of credit and insurance offers at optoutprescreen.com. And you can add your number to the National Do Not Call Registry.

Ms. Smith, of Waldorf, Md., intends to keep her mother’s wishes top of mind if she and her sisters ever decide that she needs help with her finances.

“I would handle everything pretty much the way she does now,” Ms. Smith said. “The goal is not to take over her life or take away her independence. The goal would be to help her maintain the lifestyle she’s always had.”

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