Aging Single #3: Finances And Estate Planning

The Single Person’s Guide to a Remarkable Life | Kirsten Hollander | Finances And Estate Planning


Welcome back to another episode of “Aging Single,” where Peter McGraw explores the intricacies of aging, retiring, and dying solo. This time, in episode three, he is focused on the critical topics of finances and estate planning, an essential discussion for singles navigating their later years independently. Peter is joined by two guests: Louisa M. Ritsick from Ritsick Law LLC, a seasoned lawyer specializing in estate and tax planning, and Kirsten Hollander, a certified financial planner with a wealth of experience in helping clients achieve financial independence. Together, they share their expertise on overcoming the unique financial and legal challenges faced by aging singles.

Listen to Episode #215 here


Aging Single #3: Finances And Estate Planning

Welcome back. This episode is the third in a series on aging, retiring, and dying solo. I will drop an episode on the first Thursday of the month until the series is finished. In this episode, I am joined by a lawyer and a financial planner to talk about associated topics for the aging single. Our first guest is Louisa Ritsick of Ritsick Law LLC. She practices law in Colorado with a focus on estate and tax planning and probate and trust administration. Welcome, Louisa.

Thank you.

Our second guest is Kirsten Hollander. She’s a certified financial planner at Schaefer Financial Management in Denver, Colorado. Welcome, Kirsten.

Thank you, Peter.

You two are really going to be welcome guests. This is a much anticipated and much-requested episode. There are opportunities and challenges of being single, especially when it comes to finances, lifestyle, and so on. For example, you have more mobility to pursue better opportunities for work. You can downsize and reduce your spending without any issues from a partner.

You can avoid that gambling addict or shopaholic partner, for example. You can pursue a semi-retirement without disappointing a fully retired partner, for example. The challenges are very real and not talked about enough. There are not enough good resources. You don’t have the hedge of a second income or can’t share expenses with a partner. The healthcare system is not set up for singles. We’ll cover a lot of these.

I have a variety of topics that we’re going to talk about in this episode. We’re going to talk about financial planning, challenges for singles, retirement income and housing, insurance, healthcare, care directives, building community, and some legacy and estate planning. We’ll get through as much of it as we can. For each of you, for each of these topics, I’m going to ask you your overarching perspective, and then I have some questions, including some audience questions. Does that sound good?


Financial Planning Challenges

Let’s do it. Financial planning challenges for the aging single. What are your overarching thoughts about this very big topic?

Peter, it’s important for singles to build resilience and figure out what that means to them. A lot of times, when we think about financial planning, the first layer of resilience is an emergency fund. You are like, “Do I have funds set aside in case of emergency? If I can’t work or I get sick, what does that resiliency look like for me?”

Oftentimes in financial planning, we use a rule of thumb saying, “You need 3 to 6 months’ worth of expenses.” For a single person, possibly an older single person, that might be more of a 6 to 12 months worth of expenses set aside in a safe liquid, meaning easily converted to cash, an account that you can access should you need it, should you can’t work, or should you get sick. It’s also important for those big, lumpy expenses like real estate taxes, car insurance, and things like that. Building that resilience, which can look a little bit different for everybody, is important.

You make me feel smart because I wrote about this in my book. I say that singles need a bigger emergency fund in that way. When you say liquid, do you mean a money market account? Is there some other place where you might put these funds?

Sure. Without diving way into investments, yes. Liquid means a money market account. There are lots of different ways to do that, whether it’s at your bank or your credit union. When we manage portfolios, we will often carve out a piece of the portfolio as emergency funds. Maybe it’s in cash or a cash alternative, but it’s there to give that client the confidence that they’ve got those funds to fall back on.

Does that number go up, down, or stay the same when someone is retired?

It depends on the other sources of retirement income. For example, if you were a teacher and you ended up with a pension, that’s a wonderful income source in retirement. Those are hard. There are not a lot of jobs these days with traditional pensions. That number probably grows a little bit as you phase into retirement. As you mentioned in the intro, sometimes, there’s a part-time job that happens after your full-time career is over. Maybe that person’s emergency fund looks a little different than the person who went fully into retirement and isn’t working at all.

My suspicion, especially for this kind of retiree who is prepared for retirement, is they’re doing the opposite of what they did their entire life. They were on a monthly basis and were putting money into accounts. Now, they’re having to take money out of accounts. Correct me if I’m wrong, but there is a lag that you build into this.

You’re taking the money out this year that you’ll be using maybe next year. You’re trying to manage your tax burden and so on. You might be much more liquid than you’re ever used to being liquid, in a sense. I ask this question because you have an emergency fund, but that feels like that might be part of a bigger liquidity strategy. Maybe we should define liquidity for people as I ask this question.

Liquidity means an investment that’s easily converted to cash. In my mind, it’s an investment that’s easily converted to cash without taking a loss. For example, you can invest in Apple stock. I can buy it today and sell it tomorrow. That’s liquid because I can convert it to cash. If I buy it today and they have a bad earnings report, it might be worth half of what I bought it for tomorrow. That’s not a comfortable liquidity strategy. A money market fund is where you can typically buy it today and sell it the next day. It’s almost always $1 a share, so you’re earning interest. That is a safer liquidity strategy than using a stock or equities.

People have 1 of 2 problems. One is they’re not liquid enough. If an emergency comes along, they have to buy a new car. They have to finance it at very high interest rates. Maybe they have a big bill that’s due and they’re putting it on a credit card or something like that. My guess is a small percentage of people are too liquid. Their money’s not working for them enough in that way. You’re suggesting this sweet spot of 6 to 12 months for that typical single with some variance depending on the situation.

That 6 to 12 months worth of savings may also depend on your career. If I’m in sales or real estate and my commissions don’t roll in on a regular basis, I might go for 3 or 4 months without income and need to pull on those emergency funds versus somebody who is in management who receives a salary and a regular paycheck, and they’re very comfortable in their job and their industry is very solid. That person might be able to have smaller emergency funds.

Working with a financial planner can help you really dive into the cashflow that you need pre-retirement and then also as you start moving towards retirement, building up more of those emergency funds. The way we do it is we look out. I say, “What are you going to need in the next 6 to 12 months? Tell me the big expenses.” They say, “The fridge isn’t working very well. I might need to replace the fridge. I’d like to get a new car in the next two years.” Working with a financial planner will help build those cash needs in the future into the portfolio that they’re working with.

What I hear you saying is probably the average person should not be DIY-ing this.

There are a lot of great tools out there to use on the internet. There are a lot of software programs you can buy to DIY it. However, as a single person, I don’t want to be able to ask questions about that DIY program. I’d want an advisor or somebody I could talk to on a regular basis so that I could bounce my ideas off of them. That’s the way we run our practice. We are very collaborative in the process with our clients. We welcome the questions. I look forward to talking to clients on a regular basis and helping them through these financial decisions.

Here’s my guess. A lot of the DIY solutions are not built for single people.


What Is Enough Money

They’re assuming partners and associated lifestyles with that. I want to continue probing this with you. I have to imagine that one of the challenges for the average person, whether they’re single or non-single, is having enough money and trying to figure out what is enough money. I don’t even like the word retirement. If I may editorialize for a moment, I want to get your opinion about this. I think it’s a little bit of an outdated concept, especially for a white-collar world and a world in which people are living longer.

We have this arbitrary 65 to 70 where you’re supposed to stop working. First of all, not everybody wants to stop working. Maybe they don’t want to do their job anymore. They may want to do something else. There is a fear and a real concern of outliving your savings in a world. Most people don’t have annuities. They don’t have pensions. How do people go about beginning to think about what’s enough? In part because a lot of my audience are in their 20s, 30s, 40s, 50s, and “retirement” or semi-retirement. That is a model I like to push people towards. It still feels a little while away with a lot of uncertainty in the world.

In the 30s and 40s, you’re getting into the prime of your career. You are, hopefully, passionate about what you do and you are really enjoying the career part of your life. When you start planning for retirement or planning for not working, if we’re not going to use the term retirement.

I am curious. The way I think about retirement is when you get to do what you want when you want how you want to do it. If you want to work, you’re choosing to work rather than having to work.

Some planners use the term financial independence. It is like, “When am I going to be financially independent? When am I not going to owe the bank my mortgage? When am I not going to have to save in an account to prepare for those emergencies? When have I filled all those buckets so that I can be financially independent and choose to work or choose not to work?” In working with financial planners, in particular, certified financial planners, people with those designations, they have the ability to look at cashflow, project out, and help their clients plan for the future.

When I work with clients in their 20s and 30s, we put together a loose plan. It’s a plan based on savings and how much of their income can be set aside for the future. When you get into the 40s and 50s, that future is closer, so we need to maybe have a more solid plan. We need to really set those savings goals and make sure we’re reaching them or plan to pay off the mortgage.

As you get to the 50s and 60s, we can see the finish line and all of that plan that we’ve put in place. Maybe we met clients in their 50s and 60s. You have to work a lot harder at that point to get to those goals versus starting when you’re younger and having an idea about how to save towards retirement. It’s almost more of a thought process and a concept versus an action plan. Trying to do the right things and making good financial decisions along the way, if you’re educated and taught to do it in your younger years, you’re going to be more successful later on in life.

Answering the question, “What is enough?” It sounds like it depends on where you are. If you’re 60, what is enough is going to be different than when you’re planning at 30 because you have a head start at 30. Catching up at 60 is difficult.

What is enough also depends on your lifestyle. There are a lot of people that have big goals and dreams, and then we have clients that have very modest lifestyles. I have to encourage them to spend money. I’m like, “Take the trip. Bump yourself up to business class. You have more than enough. It’s okay to spend those extra dollars.” That’s a tough concept when you’ve been saving your whole life and working towards this goal of retirement. Working with a planner to do some analysis of, “What do I want my lifestyle to look like?” You can back into saving goals. Whether it’s 5 years in advance or 20 years in advance depending on your age, you can help set aside those dollars to fund the retirement income you need later.

One thing that I’ve had come up in my practice several times is planning for the unexpected and the expenses of healthcare and assisted living, and having a sufficient income stream to be able to fund that. I spoke with the financial planner about a shared client trying to figure out how we were going to get sufficient income when he has real estate and retirement plans to be able to fund the expenses of a long-term care situation with full care, which, in this case, was going to be about $10,000 a month.

Is that a nice place?

It is nice.

I want to check. I don’t know what $10,000 gets you.

It is nice.

That’s a shocking number for a lot of people to digest if they want to be in a nice place on their own with full care, which is food and nursing.

Correct. This individual cannot live on their own anymore given their health situation. They are in an assisted living-type place but it isn’t full care. They’re going to have to move to a different place, and the income needed to fund that is fairly significant. A lot of people are single. They bought their houses a long time ago. They’re going to have a significant capital gains tax if they sell, but they don’t have any other assets when they have to move into assisted living to give an income stream. I don’t necessarily think you have to do all of your planning based on the worst-case scenario, but to consider it a little bit can save a lot of hassle and heartache at a really difficult time.

I don’t want to punt on this because we’re going to get back to it, but if I can articulate the thoughts of a single person, it is, “I love my freedom. I enjoy my solitude. I like the autonomy that I have in my life. I am very connected to the world. I’ve got friends. I’m involved in the community. I have a family of choice. I have a family.” The way the model is set up in most places, certainly in the United States, is that you’re expected to have this other person who you rely on and they rely on you. They’re the hedge. They’re a decision-maker.

There’s a degree of freedom there. It’s like, “I don’t have that, but I have all these other things. How is it that I’m going to make my way so that I’m not living in poverty and that I’m not in a bad position in life? How should I be thinking about this?” That’s why we’re doing this. It’s because there’s not a great model aside from the Golden Girls. That show hasn’t been on TV in many years. What are your reactions, both of you, to that? That’s what’s running through the mind of a reader in all likelihood, the worst case.

It’s having a plan and sitting down with your advisor, whether it’s your attorney, your financial planner, or your tax accountant. A lot of those trusted advisors can help you think through the worst-case scenario. I hope it never happens with my clients. I hope I never have to go there, but I’m always going to think about it. I joke with my clients, “You pay me to be skeptical. You pay me to think about the worst-case scenario.”

Financial Advisor And Estate Planner

What I’m hearing is the first thing is you need a financial advisor who is certified and has fiduciary responsibility, which we’ll talk about what that is, and you need an estate planner.

I would advise it. There are DIY programs on the internet. I often have people ask me, “What do you think about them?” The issue that I see with them is when you do talk with an attorney, you can talk through all the various options. We have seen a lot of the worst-case scenarios. In a DIY program, you might get a question, “Who do you want to act as your agent under a power of attorney?” but then there’s no follow-up question.

It’s not like, “Who should you pick?” These DIYs are built for people who are more traditional than the average lifelong single in that way.

I appreciate your thinking that you need a financial advisor, but the attorney’s role for a single person is almost more important. You need to name people to help you if you are incapacitated. Who’s going to handle your money? Who’s going to pay the bills? Making sure you have those documents in place is very important. That’s probably hand-in-hand with putting together that emergency fund. The first step is making sure that you have the legal documents. This world is built for those couples who function together. If you show up at the hospital by yourself, who are they calling?

That’s right.

You need those legal documents so that the person you identify as your healthcare power of attorney or financial power of attorney can step in and help you. It’s building that team to be resilient. How can you be resilient in this world?

In 1960, 90% of adults would go on to get married and did so on average by age 21. The system was built because if someone showed up at the hospital as an adult, they probably had a spouse. Those numbers are much lower. I don’t want to say never, but it doesn’t seem like we’re ever going back to that. There are these unique challenges.

I’ll make the case for the financial planner. People know my financial planner, Money Amy. She has been on the show before. A good one with a fiduciary responsibility serves multiple purposes. They think about the worst-case stuff, but they can also be like, “It’s okay to do this. You can live a little.” There are two people. There’s a person who doesn’t have enough and needs a firm talking to, and then there’s the person who has taken care of business and could use a little bit of, “Go spread your wings a little bit. You did some hard work. You should enjoy the fruits of your labor,” in a sense.

I had an experience that makes a nice case. This was through TIAA-CREF because that’s where I have my savings as a professor. He ran some Monte Carlo simulations. He simulated a future state of the world in 10,000 ways. For some of them, life is really good and for some of them, life is not so good. He suggested a slight rebalancing that made life a little less bad. It protected a bit of my downside, especially if I decided to be aggressive and semi-retire. That made me sleep a little easier knowing that. I couldn’t have come up with that on my own. I needed a pro. What is a fiduciary responsibility? We’ve used the term twice.

A fiduciary, in my opinion, always puts their client’s interest first. I will always look out for your best interest. I am making sure that you’re in the right product with the lowest fees, that we’re dealing with honesty and transparency, and that you know how I’m compensated and what other forms of compensation I might be receiving. I’m only a fee advisor, so I don’t receive any other forms of compensation, but lots of people who call themselves advisors want to sell you stuff.

Let’s be honest. They want to sell you life insurance. That’s how they make their money. They are self-interested, like, “You should get this product.”

Being a fiduciary means putting your client’s interests first and seeking out the best product, whether it’s insurance or investments for their needs. That’s not a textbook definition.

I get it, but that’s the spirit of it. How do you find out if someone has that?

As a fiduciary?


Starting with the CFP designation, the CFP designation requires ethics continuing education on a regular basis in addition to number of hours of continuing education. Using that as a starting point is a great way to do it. Not everybody is A CFP. There are a lot of other designations out there that require that kind of ethics certification that you’re a good person and you’re putting your client’s interests first. It’s talking to them and finding out what their fee structure is as well.

CFP is a Certified Financial Planner?


Let me ask a couple of related questions from the SOLO community which people can sign up for at PeterMcGraw.org/Solo. One question is, “What things do singles have to be mindful of when financial planning differs from married folks?” Another is, “What laws and/or Social Security differences should we know about and the impact they have, and how do we plan for them?” This is a follow-up, “As a 33-year-old child-free solo who worries that so many of the few social support programs will exist, what does one do to prepare?” Those are related. This person’s in America. They’re worried things are going to go away.

It is sitting down with your planner and looking at your life goals and lifestyle expenses and planning for, “How am I going to pay for those in the future?” Whether it’s full retirement or partial retirement, a planner can help you figure out what you need to save to put away for those goals. For the time being, we get lots of questions whether it’s about social security or the tax code. Louisa, I’m sure you get questions about the estate planning laws. We have to function on what we know.

I try not to let politics in the world cloud my judgment. That 33-year-old will probably get social security. Might they have to wait until 75? Maybe. It might get pushed back, but there will be a benefit for them in the future of some sort. We will always use social security as part of their retirement income in the future, but typically, we’ll push it off. We’ll decrease it. We’ll be as conservative on our estimates as possible so that we’re not relying as heavily on it.

It’s politically suicidal to get rid of social security even though there are some funding challenges this country is facing. We have audiences in other countries, the UK, Canada, Europe, Australia, and so on. Those places have their own social safety nets that are sometimes better. In some places, they’re worse than they are here.

Housing For Aging Singles

Let’s start to talk a little bit about housing and maybe some other forms of income. What are your overarching thoughts about how singles especially should be thinking about housing themselves in older age, including this topic that already came up, which is some form of assisted living where you get to maintain some of your independence to having to house yourself perhaps with a nursing home and so on late in life.

When I first started practicing, there seemed to be more of a focus on, “I want to stay in my house until I die.”

We call that the feet-first plan. You’re leaving feet first. It’s like, “I’m leaving my house feet first.”

My mother was a feet firster. She accomplished that. It caused us a lot of headaches, but that was what she wanted.

Nursing homes or assisted living facilities had a negative connotation to them. There have been some great places built that I have a lot of clients who really enjoy them. They are a continuum of care, so you can get in when you don’t need that much assistance and then change within the facility as your needs change. For a lot of singles, it provides not only care and housing but also provides a social outlet that may not otherwise exist.

I have clients who are in their homes. They’re isolated and not terribly happy. The people they’re interacting with are nurses, kids who come by, neighbors, or friends. When they move into one of these places, there’s a bridge club, there are people to have dinner with, and maybe there’s a movie night and things of that nature. It gives them a social outlet that they might not otherwise find as easily.

I did a live taping for my previous episode at one of these facilities in Boulder. I was like, “Can I put down a down payment?” The staff was super friendly. The social stuff was very clear. They had lots of activities. One of the concerns, especially for solos, is that if you live long enough, you outlive your friends. You need to be constantly replenishing your friendships. You need multi-generational friendships and so on. That’s hard to do when you are isolated. How do you meet these new people? How do you meet people 10 years younger than you, 20 years younger than you, etc.?

These facilities, and this is a little macabre, are constantly getting new inventory in. It’s like, A whole new fresh bunch of friends have come in.” I am making a joke about that, but it’s a reality. It’s part of the human condition. In nature, father time and gravity are undefeated. If you are fortunate enough to live a long, vibrant life, you’re going to need to make new friends in your 80s and 90s maybe, even at 100, in a sense. These facilities, when done well and well-staffed, can do that. The better they are, the more costly they are. What’s someone to do?

For these retirement communities or continuing care retirement communities, go back to your financial planner. Ask, “What can I afford? Maybe it’s not the Four Seasons, but maybe I can get into the Marriott. I don’t have to go to Motel 6? That’s fabulous.” We can help you figure out what you can afford to spend on one of these communities and how you get into them.

They’re all built on different financial models. Some have a large buy-in like you’re purchasing a home and then you pay a monthly fee. For some of them, you pay rent, and that rent can change depending on the care you need. There are a bunch of different financial models for these communities as well. The other part about a handful of the communities is they’re nonprofits.

Should you be looking for that?

Potentially. They’ll do financial underwriting to make sure you can afford to get in there and stay there as long as you need to. Should your health change and you end up needing an excessive amount of care, they will take you on because they’ve got this nonprofit pool and they won’t kick you out. Let’s say you develop dementia later in life. You need a lot of memory care and it’s more expensive than you had planned on. They won’t kick you out of the facility. They’ll pay for your care.

There’s a healthy amount of skepticism and pessimism out there. People are worried. You hear the horror stories of abuse and so on. Things have improved a lot. There’s a lot more government oversight. There’s a lot more transparency. There are grades and so on so people can make a more informed choice. I had one member of the community. Their question says, “Should I go bankrupt and go to Medicaid?” That shows you the level of pessimism and concern that people have about the future. What is your reaction to that statement or that question?

I personally would not recommend that as a planning option.


I don’t do government benefits planning. That is not my sweet spot. The rules and regulations change constantly, so what worked last year might not work this year. That’s not an area where I specialize. They call them elder law attorneys, but it applies to any age group. If you think, “I am not going to have sufficient funds to do this on my own. I know that I’m going to need government benefits. How do I arrange that so that I can maximize what I’m entitled to?” I usually refer to that workout. The people that I have seen who rely solely on government benefits, it reduces your options. You’re probably not going to be Four Seasons or Marriott. It may be a place that you wouldn’t have chosen for yourself, but if you don’t have other options, it’s certainly doable.

You’re saying, “Fight the good fight. Don’t give up.” Churchill would say, never surrender. Let the chips fall where they may, but don’t opt into this because it’s really constraining.”

As a solo person, we often push against Medicaid. Medicaid is when the government’s going to take care of you when you have nothing left. That’s really hard when you’re a couple. You have to spend down your assets to almost nothing and have a house. If you have 1 spouse who needs care and 1 spouse who’s still living at home, that’s not an attractive situation.

If you’re a solo person and you’re not thinking about, “What’s my spouse going to live on?” Medicaid might be a road to think about and consider, but as Louisa has said, you don’t get as many options. You don’t get to choose your care. Your choice of facilities and retirement communities are going to be much more limited.

All of these communities will do some sort of financial underwriting, and you have to have the assets to get in there and stay there for as long as they think you’re going to be there. If it’s a nonprofit, they’ll maybe step in and pay for your care or Medicaid might be able to step in and pay for your care later in life should your situation change. One of the things that we counsel our clients is, “Let’s not think about that but let’s pick a facility that takes Medicaid so that if something happens or something changes, I don’t have to move. I can stay where I’m at.”

This is a worst-case scenario.

It’s a backup backup plan.

That’s good. I want to ask about the DIY side of this because we’re talking mostly about housing. I made a Golden Girls quip. I know people who are planning that they’re all going to get apartments or condos in the same building, or they’re looking into a community and they’re going to take care of each other in a sense.

One person wrote, “I may want to pool some resources in the future with like-minded solo people through independent communal living.” Another person says, “Should I invest in stuff, rental houses, and businesses with friends?” This is a way to replicate this nuclear family or this extended family approach but do it with family of choice, friends, and so on. The world’s not built for this. There have to be limitations, special considerations, and risks. What are they?

One concern is if your carefully laid plan falls apart, how do you protect yourself in advance? If you’re a married couple and you buy real estate together, and you decide you don’t want to be married anymore, there is a divorce proceeding. That law is not available to unmarried people who buy real estate together. I advise people if they are setting up alternate arrangements to get things in writing and set up ahead of time what the expectation is while they own the property jointly. Also, if they decide, “This isn’t working and we want out,” what is their exit strategy?

I do cohabitation agreements. When people go into businesses together, and this applies across the board, I always ask them to look at their operating agreement. I’m like, “What provisions have you made in this business you’re entering into in case one of you is incapacitated, goes bankrupt, or dies? How do you protect yourself within this arrangement in advance instead of waiting until it happens? You’re not going to have a court process or the same court process that might be available.”

It’s like a prenup for the Golden Girls. You should see someone like you, an estate planner, to do this kind of thing.

That would be my recommendation. At the very least, talk about it with the person and figure out, “Here’s our exit strategy if these various events occur.”

I find this tremendously appealing because I want to try to maintain my own space. I don’t want to have to have roommates living in a house, so having close friends close by or someone to call in the middle of the night when you’re sick or afraid down the hall. This, though, is worrisome. People’s situations change. Suddenly, you have to care for someone or they have to care for you, or they make bad decisions. Suddenly, your fate is locked in with this other person.

It’s hard to predict the future. Having what might be productive but uncomfortable conversations about the worst-case and having a professional there to mediate this and take people through the scenarios, which are the worst-case on how you’re going to deal with them and have this in a legal document seems prudent.

I agree. It can save a lot of hassle, heartache, and difficulty.

It’s easier to do a Golden Girls-style prenup than it is to do a prenup because there’s no like, “If you loved me, we wouldn’t need this thing that happens.” It’s easier to see the risks when you get together with six friends to purchase a property or to intertwine your lives as caregivers, support systems, and so on, even as a hedge perhaps if you wanted to.

This one person who says, “Should I invest in stuff, rental houses, and businesses with friends?
To me, I’m always like, “You’re more than just friends. Now, you’re business partners. Can your friendship handle that? Do you have the proper documentation in case?” It’s one thing to lose a friendship. It’s another thing to lose a ton of money and a friendship.

Louisa’s point is if you’re thinking about going into the relationship[, find the exit strategy. Don’t go into it without thinking about how you’re going to get out of it. You have to do both sides before you even sign on the dotted line.

I’m going to make a strange plug here. I have an episode and a chapter in the book on Relationship Design. It’s a model by which two or more people can co-create their relationship. The relationship design, which you might use for a romantic partnership, a sexual partnership, a friendship, siblings, etc., would work very well in this situation because it requires honesty and checking in, and revising is necessary once you have more information about your agreements and so on. It’s especially useful for relationships that don’t have a script that people can default into.

One of the nice things about getting married is the world already tells you how you’re supposed to behave and what you’re supposed to do. It also has all the mechanisms to support that, including divorce, for example. When you enter into anything that’s non-traditional, there’s not a script anymore. You get to design your script, so to speak. A relationship design approach with a professional documenting this legally is the way to go. It’s not a matter of whether you should do it or not. It’s that you should do it if it feels right, and if you’re going to do it, do it right.

I agree with that recommendation because just because someone is a friend doesn’t mean they’re going to be a great business partner. If you talk about it ahead of time, you might realize, “We’re both really conservative,” or you might realize that 1 is not conservative at all and 1 is extremely risk averse. Before you even enter into it, you either decide not to do it or put in place safeguards that are going to prevent the inevitable conflict that’s going to come up.

A tightwad and a spendthrift.

It doesn’t work so well together.

I’m sure you see this.

Regarding your comment about making sure you’re being honest, I would extend that to being transparent. A lot of these endeavors that you’re talking about are financially related. You need to be open, honest, and transparent about the finances of the arrangement as well. You can’t say, “I have X amount to give.” You need to say, “I have X amount to give. This is what my bigger picture looks like.” Going into it as transparently as possible is also important.

It is interesting. We don’t, as friends, talk enough about money. You’ll tell your friends salacious details of your sex life perhaps, but they have no idea how much money you make or how much money you have saved. That may be fine, but if you’re going to enter into an agreement with someone where you’re going to be caregiving for each other and so on, it seems like you can’t be bashful about the good, the bad, or the ugly of your financial situation.

We’re all of that generation where talking about money was taboo. You didn’t do it. It was considered very poor taste. It’s one of those barriers that we try to bring down a little bit. I don’t think you need to tell everybody everything, but if you’re entering a business relationship, you need to be aware of what you’re investing and how much you can afford to lose. Open with that with your partner.

It may be partners. It could be a group of six.

I don’t want to jump too far ahead. I don’t know if you’re going to talk about the estate planning piece of that. If you are entering into an agreement for caregiving in the sense that, “We’re going to live independently, but this is who I’m going to call if I need to go to the hospital at night,” having a medical power of attorney that makes it clear about that relationship is really helpful. If you enter into a business with someone and you want them, if you’re incapacitated, to be able to take over the business, I often do financial powers of attorney and a durable general power of attorney that covers the business relationship and access to the funds that would be needed in the event of incapacity or death with respect to that business.

That is a good preview of what we’re going to get to here. I appreciate you saying that. I want to finish with a couple of questions about housing, and then let’s talk about healthcare because that’s related to this. A member of the SOLO community asks, “For a while now, I’ve been thinking about planning for an investment property, something small and ground-level that might also be a good option for my future retirement in twenty years’ time. Any thoughts or tips?” That’s a pretty specific question. Someone also writes, “When is the best time to scale down to smaller, easier housing options, or rather, when should be the last time you move into a new home?” Those are very specific.

For the first one, we always joke when people ask us about buying investment properties. I say, “Are you really ready to unclog a toilet at 2:00 AM? Are you ready to be that property manager or are you going to outsource that?” That’s the first part. How hands-on do you want to be with your investment property?

I talk to people about this all the time. I’m like, “If you’re going to do 1, you should do 10. You’re better off having 0 than 1.” That’s my opinion. For this reason, it ends up being a lot of work for 1 thing, but when it’s 10, you can hire people and so on. It’s a lifestyle decision in some ways when it comes to this.

It can become a career too. That could possibly be the way you pre-retire or think about getting into retirement because you have something to keep you busy after your full-time career. The hard thing about real estate is we think of it as part of your investment portfolio. It is an asset, but it’s not liquid, going all the way back to that first conversation. It is very tough to get your cash out of that property should you need it. That’s one consideration to have. Another consideration is if you’re going to borrow to buy that property, what are the rates? It’s not as attractive now as they were a few years ago.

The last thing to think about is where you’re buying. Denver, our area, hasn’t seen a big decrease in real estate prices. Everybody thinks real estate goes up in this part of the country. We know, if we look back over time, that’s not always the case. The person with the question, “If I buy a place now,” is something that they might consider moving into in the future. Meaning, they don’t want to leave the neighborhood anyway, so maybe it is a good time to get in because they’ve seen prices soften. It’s something to take a step back and look at A) As a part of the portfolio and B) As a part of their overall financial plan.

Anybody who tunes in to the show regularly knows that I’m not that pro-home ownership for singles. I get why it’s desirable. It’s some stability. It’s for savings. For the average American, It’s their only real investment in their future because they’re not that good at saving in other ways. I get that, but it limits your mobility. I always say, “If you buy a house, you have to expect to be in there for five years minimum to break even on this.”

To your point also, Kirsten, it’s no guarantee it goes up. It’s hard to predict the future in that way. It also ends up limiting your lifestyle in some ways. There’s maintenance. Oftentimes, people overbuy. They buy more space than they need. It’s built on a family model. You have a living room that you use, but then you have a dining room that you never use. You’re paying money for that dining room and so on and so forth.

It may also limit you in terms of things like travel. You have this house. You have this mortgage. When you’re retired, you don’t have to be in that neighborhood all the time. Having a smaller place allows you to spend three months in Latin America, which is something I’m going to want to do once November hits in Colorado. In November, December, and January, you go somewhere warmer and cheaper. It has to fit with a lifestyle decision. You want to be a homebody. You want to be involved in the neighborhood, friends, etc. It has to fit a broader financial thing. It’s not an obvious choice for singles, and it’s not obvious knowing that you might outgrow the space that you’re in as you age. There are stairs, etc.

Find that main floor master or main floor primary bedroom.

Find the ranch house. What I would say is find a condo or an apartment building that has an elevator, a concierge, and a gym. I’m biased.

Those places I don’t think existed several decades ago. There are a lot more of them now, and they’re a lot more attractive. You also don’t have to mow the lawn.

I’ve mowed so many lawns in my life. I would never mow another lawn.

It can be very attractive.

Long-Term Care Insurance

We have to talk about this. I apologize for overlooking this. Someone is screaming at the show, asking, “What about long-term care insurance?” We talked about nursing homes and blended assisted living. The idea of trying to save for that is daunting. You may not need it. For example, you may be a feet-first person very happily. That works. You may kick the bucket young. You don’t know. People contemplate. Especially around 50-ish, they start to think about long-term care insurance. I never hear anything good. Make the case or don’t make the case? How should people be thinking about this product?

I always tell people to look into it. See what your options are and how much the premiums are, and then determine, “If I’m paying this much in premiums and then this is the benefit that is possibly available to me in the future, does that make sense as an investment?” That’s how I think about it.

We should probably define long-term care insurance for people. I’m thinking about that.

Long-term care insurance, you typically pay a premium on an annual basis. There is a lot of flexibility to choose the type of coverage you get. Most people, if you want the full ride, are going to give you a per-day dollar benefit. For example, you’re going to buy long-term care insurance for a $200-a-day benefit to cover the cost of your care in assisted living or a nursing home.

Some of that $200-a-day benefit can also be applied to home healthcare, but not always. When Louisa said, “Go ahead and look into it and see what you can afford,” maybe you can only afford a $100-a-day benefit. Is that something that is maybe a gap filler in your financial plan? Instead of buying the best plan out there and being able to afford the Four Seasons, for lack of a better term, maybe we buy something that pays for half the Four Seasons because I can self-fund the rest of it. There are a lot of ways to look at long-term care.

You see it as a hedge for someone who’s preparing for the future. Some people, a small number, who will be able to pay for a comfortable situation don’t need long-term care insurance. They’re “self-insuring”. There’s the person who’s like, “I’m saving, but I’m not sure it’s going to be enough. I don’t want to end up in the Motel 6,” to use our metaphor. They’re like, “I’m going to invest money now and have this as a hedge against the future in case I live to 100 and need it.” That’s the key to long-term care. Is it indefinite or not?

No. Most policies only pay out for anywhere from 2 to 5 years, so it’s 2 to 5 years of benefit. The average stay in a nursing home is right around three years. They’re only planning to pay for a certain amount of time or a max lifetime benefit, which you could maybe spend out and in the first eighteen months. That’s why you have to dig into the policy and see what is offered to you and what you need for your plan.

That’s interesting.

If you have memory care issues or you know that that’s a possibility in your family, I would guide you to maybe consider long-term care because that ends up being the most expensive part of care. It is when you end up in a memory care facility.

I assume things like when you start paying these premiums, they end up affecting their cost. I’m sure there’s a formula. What goes into the formula for figuring out this?

Closer to 60 is probably more realistic for looking at it. You can start paying in your 50s, but you’re going to pay more before you’re going to need it. The longer you wait, the more expensive it gets. 60 to 65 is typically when we see people picking up the industry average. There’s also something called a waiting period. It’s like, “Does the insurance kick in on day 1, day 90, or day 120? What’s the waiting period that I have to fund my care before the insurance kicks in?” The per dollar-a-day benefit and then how long that benefit is paid out will impact your premiums.

I’m guessing that if you’re going to make this decision, you talk to?

A financial planner. For the record, I do not sell insurance. We would counsel you and we’d get some consultants. Although, I have to say that as a solo person, you’re probably more self-funded or self-insured than you realize.

How so?

If you do buy a house, let’s say, that also becomes an asset that you can turn around, sell, and use for your care in the future. What we see typically is those solo people who are living a full life and enjoying travel and all sorts of entertainment activities, if you end up needing care, you’re no longer traveling and spending the money on that entertainment factor of life. It is your trading expenses. The cost of those retirement communities is expensive, but you’re also not traveling anymore, so you can afford that care. There’s a trade-off there.

One thing that people have to take away from this conversation is the value of preparation which is twofold. One is anything you can do to invest in your future, especially financially, is going to give you more freedom. You do not have to rely on other insurance, other financial instruments, the government, and so on. The other one is, and we’re going to start to get into this, to have a plan to be prepared for how you’re going to maintain your freedom and how you’re going to have people to be able to support you because you don’t have this turnkey spouse.

Peter, the other thing about the insurance piece is long-term care and life insurance both can protect assets for heirs. As a solo person, you need to decide whether there are heirs and whether you want to leave some sort of legacy. If you do want to leave a legacy, maybe you pick up a little bit of long-term care so you don’t spend down all of your net worth or you buy some sort of insurance policy. Most solo clients that I have are like, “I want to spend my last $1 on my last day, and I want to make it fun.”

This is for someone who doesn’t have children or doesn’t have dependents, more generally siblings or whatnot.

I would also recommend that in addition to long-term care insurance, if you have an employer who offers disability insurance, that’s a great investment. It gives you another income stream when you are unable to do what you were previously doing and can provide a really nice transition period for people and a safety net there.

Disability insurance, if I understand this correctly, is if you get sick, get injured, or you’re unable to do your normal job, it provides you a benefit. Some employers offer some base disability. They pay the premiums for you. There are also sometimes opportunities where you can bump it up. Is that right?

Correct, or you can buy your own policy. When I first started working, I purchased a policy because I had not been in a large law firm. My entire career has been either solo or in a small firm. I purchased my own policy, funded it myself, and paid the premiums myself. That’s also an option if you don’t have an employer who’s going to offer that as part of their employee benefit package.

It’s very important for single or solo people as well early when you’re accumulating in that accumulation phase because you’re protecting your earnings. If you can’t work, it gives you a source of income.

This is my behavioral economics training kicking in. The way I’ve always thought about insurance is you want to insure big things. You don’t want to insure small things. Buying the warranty for your television is usually a terrible use of your money, but buying car insurance that takes care of your health should you get into a car accident is a good use of your money. This seems like if you don’t have the hedge of a second income, your disability insurance becomes that hedge, in a sense, until at some point you can be self-funded. The year before you retire, you don’t need disability insurance. That is the way I think about it because you start your retirement a little earlier.

Disability benefits typically end at age 65. It’s not that if you get sick and injured, they pay out for your whole life.

Annuity And Reverse Mortgage

I want to ask about two other financial instruments and how they relate to singles especially. One is an annuity, which, I have to be honest, is a bit appealing because it can reduce some risk. Also, I’m one of those people who sometimes have a hard time spending money.

You need me. I’ll help you do it.

Trust me. I have a lot of people who would be willing to help me spend the money, but it is getting me across that, especially as you move into retirement and you’re uncertain like, “Am I going to live ten more years? Am I going to live 30 more years? I don’t know.” An annuity is a fixed income. You buy this product at some point and then you get a monthly check.

I have a friend who’s a fellow behavioral economist. He has the same problem. He’s like, “I want to buy an annuity to force me to spend my money,” because to reinvest your annuity money is the most irrational thing that you can do in that sense. The 1st one’s an annuity and the 2nd one is a reverse mortgage. To my understanding, you get to maintain living in your home, but you’re selling it to a company that then pays you a benefit until the principal is liquidated. Have I said that correctly?


What do you think of those two things?

You would like a good financial planner to advise you on both of those. I have seen so many clients come in and they have purchased these annuities. They’ve paid so much in fees to purchase them and it wasn’t a good investment for what they need. I don’t provide financial advice, but I can tell when something really doesn’t fit.

It is the same thing with the reverse mortgage. It’s not always appropriate. It can create some problems when the unexpected happens or after the person dies. That’s more of an administrative hassle. That’s why Kirsten would be able to provide you with some better advice because I don’t think she would try to take advantage of someone. They don’t sell the product. They could help you weed out the ones that are not good investments.

I appreciate you saying this because I asked that question knowing that a lot of these products suck. They’re a nice idea in principle, but in practice, they’re not often ideal.

There is some sales guy out there marketing them and guaranteeing you income for the rest of your life. You’re like, “You’re going to pay me for the rest of my life. That sounds really good. How does that work? I am going to get a 6% return every year and do not have to think about this? There’s no downside?” There’s a lot of marketing around that. I would agree. We do not sell annuities. When they come in, we try to unwind them or exchange them for the best possible option.

In general, it’s not a good decision.

Going back to your comment about behavioral economics, there are some people who need that guaranteed income stream to feel secure.

To sleep at night.

I happen to work with a lot of single women. Single women in particular really appreciate knowing, “I’ve got $1,200 coming in every month, and I don’t have to think about paying my mortgage and my insurance. This is going to guarantee that I cover these expenses.”

One of the things that is intimidating is the unwinding of your assets. Assuming you’re lucky enough, have worked hard, started early, and caught the breaks, it is like, “Now, I have to take this money out, and then I need to put it into a CD. I need to let it mature.” Some people want to live their lives. They’ve spent their whole life worrying about money and pinching pennies. They’re getting older and are like, “I have uncertainty. I don’t know how much I should be taking out.” It’s like a paycheck. “I’m getting my paycheck, but I don’t have to work,” is appealing, but you want a fair paycheck.

You need to really dig in and look at the fees on the annuity. A lot of annuities are expensive. There are a lot of writers. There are different ways you can structure the product. It’s an insurance product. An annuity is an investment with a life insurance wrapper around it. For example, if you don’t annuitize the investment, it will pay out a death benefit to somebody. You can name a beneficiary on it.

Annuities are more attractive now because interest rates are slightly higher. If you had asked me a few years ago, I would’ve been like, “Don’t even look at them,” because they use the current interest rate environment to determine your payout. When interest rates were zero, your payout was very low on your investment. Since interest rates are slightly more attractive, you can get a better payout on those products.

The insurance world has come up with a lot of zero-fee annuities or charge a monthly flat fee. That’s more attractive than the 9% sales charge at the front. There are more attractive products. You have to balance the clients’ needs and the way they feel about their money with the type of investments that you put into their net worth and into their portfolios.

To put it briefly, it sounds to me, that for peace of mind, you’re going to have to pay a pound of flesh with an annuity. Know that that’s a trade-off. That’s a fine trade-off to make, but it’s a trade-off.

A lot of the charities are offering charitable gift annuities.

I don’t know what that is.

It would mean you would purchase the annuity with the charity. It would still provide an income stream, but in the end, it goes to the charity

What a wonderful idea.

That’s what they’re getting out of it. I talk to clients about that a lot as part of their plan, especially when they’re trying to provide an income stream to someone else.

You can also do it with retirement dollars. If you’re over age 70 and a half, you have to take distributions from your retirement accounts. You can take part in that and buy a qualified charitable gift annuity as well.

I can imagine there’s a dog lover reading this and is like, “I want whatever is left over to go to the SPCA.” That’s interesting.

To finish your conversation on reverse mortgages, that is your absolute last resort. There is a product out there. There is a reverse mortgage line of credit that seems to be more attractive, but it is not something we consider until we’ve exhausted all the other options.

Briefly, why?

Fees and expenses.

Healthcare For Aging Singles

It’s not a good value. You’d be better off liquidating your house and downsizing or changing your residence. The capital gains may be painful, but they’re not as bad as a typical reverse mortgage. That’s good. Let’s talk about healthcare stuff. Louisa, you’ve teed this up a little bit. Let’s use me and my soul sister, Julie, for example. We’re both unmarried. Let’s suppose the two of us decide since we both live here in Denver and we trust each other, we’re going to rely on each other. What are the things that Julie needs to be for me as I start to age?

If we’re looking at healthcare, you would need to do a medical power of attorney. The person who is making the power of attorney is called the principal. In the power of attorney, you are appointing an agent to act for you. The standard under Colorado law for a medical power of attorney to take effect is any time the patient is unable to provide informed consent.

I’m unconscious.

You’re unconscious or it could be the doctors have determined that, for example, due to a traumatic brain injury, you may be able to speak and communicate but you’re not able to process what they’re saying. It’s not informed consent. That document is really important. If you do not have one, but you still would want Julie to act, there is a proxy decision-maker law in Colorado. What that says is there’s no agent under a power of attorney and the patient is unable to provide the consent the doctors need for some action.

Is it for surgery or something like that?

That’s right. They are going to try to find an interested person. An interesting person includes a spouse, a descendant, a parent, a sibling, and a close friend. You have to think. These are healthcare providers who are trying to figure out who those people are in your life.

You can’t trust them to make the right decision.

They may not know about Julie.

That’s right.

She may not be in your contacts. Nobody has address books anymore.

They’re like, “We’re so close. It says Julie. It doesn’t even have her last name in here.”

They may not know who to contact in that situation. That’s why the medical power of attorney is so important, especially between unmarried people. I have a lot of clients who are estranged from their families. They’re single. They don’t want their siblings making those decisions. They don’t want their parents making those decisions. It’s more important for them to have something in writing that appoints someone else to do it so that their parents or siblings are not the default because it’s easier to figure out who that is.

I have a lot of follow-ups to this. First of all, I have a sister who I do trust. She lives in New Jersey. She’s far away. How does this work? I imagine almost a cascading system where it’s my sister, Julie, my friend Janet, and my friend Darwin. These 5 people or 10 people can make these decisions for me. I have the luxury of having ten people that I trust with my life. How does that work?

You can act as an agent for someone even if you are not in the same state they are. A lot can be handled over the phone. You can decide on a priority list. You could say, “I would like my sister, but if she’s not available, then Julie,” or vice versa. You could go down the line of your ten friends. You can have co-agents. You can allow them to act. Either they have to act by majority rule or unanimous consent if there are only two. It’s easier, however, especially if 1 is out of state and 1 is here to allow them to act independently with each other. The one that’s here might be able to respond more quickly. This is the benefit of maybe talking with an attorney about these decisions as opposed to DIY.

There are websites where you can create these things, pay a fee, and so on.

That’s correct. Those are some things to think about. That’s a really important document though for singles, planning for incapacity. It is the same thing for finances because there isn’t a proxy decision-maker statute with respect to your finances. The alternative is a court-appointed conservator, which is intrusive and expensive.

For the medical power of attorney, I want to ask a follow-up about this. I have to assume you want the consent of these people, and you’re going to want to follow this up with some relationship design where you say, “I want to give you an idea of what I want you to do if I’m incapacitated, like, “Do not resuscitate,” or, “I want you to be very aggressive,” or whatever that your expectations are and them being very clear on that.

That’s correct. Those are excellent conversations to have. You also can do a living will, but that’s intended to cover your end-of-life decision-making, so you’re in a terminal condition or persistent vegetative state. I have a lot of clients, however, who are worried about dementia and Alzheimer’s. That’s not considered either a terminal condition or a persistent vegetative state.

We draft language that we attach to the living will that says, “I understand that severe dementia or other conditions are not considered a persistent vegetative state, but I am letting you know what I consider the quality of life to be and how I would like for that to look.” It’s something that’s great to have conversations between people, but it’s also great to think about that when you’re drafting a medical directive on what your thoughts are. It’s really hard to be a caregiver for somebody else and substitute your judgment and think, “I hope I’m doing what they wanted.” It’s helpful to have that for that person to fall back on, “This is what Peter wanted, so I feel comfortable with my decisions.”

How early should you be doing this?


I knew you were going to say that.

I have them done for my children because as soon as they’re eighteen and they go into the hospital, they’re adults. They don’t have to call me. They don’t have to tell me what’s going on. You want them done yesterday.

For the person who’s making a to-do list, let’s update their to-do list. One is if you’re not aggressively saving for your retirement, you need to do that. If you have not consulted with a professional, ideally a CFP or equivalent, that’s going to be in your best interest. You should have a medical power of attorney and a living will. What else?

A durable general power of attorney, which is a financial power of attorney.

A different person could be the agent. Is that the word for that?


I am the principal, and then I have an agent. I might have Julie making my medical decisions and Darwin making my financial decisions.

That’s correct. That’s often the case because the people who you trust to be caregivers may not be financially savvy or financially capable. When people think about estate planning, they think about their wills often. That’s a big piece of it, but especially for solos, the incapacity planning with the powers of attorney, living will, HIPAA authorizations, and things of that nature is more important because you’re still living at that time. What you want, you want to have in place as early as possible.

You said a durable power of attorney?

It’s a durable general power of attorney.

You’re incapacitated in the same way that we talked about previously, and then this person can pay your bills and access your money.

That’s correct. They had to go to an assisted living facility or memory care.

They can write the checks.

They’re going to pay for it. They’re going to work with the agent under the medical power of attorney to determine where to place you, but they’re going to be the financial responsibility. They’re going to get your tax returns prepared and filed. Anything financially that you as an individual could do, the power of attorney grants them the power to do on your behalf.

They can open new accounts for you.

Let’s suppose I don’t have these things and I have a head injury. I get into a car accident or I get hit by a car or whatever it is. I’m incapacitated and I’m not going to be able to function on my own anymore. Who’s making these decisions? The government steps in?

At least on the medical side, they could rely on that proxy decision-maker law, somebody to make those short-term immediate decisions. If you don’t have them, the alternative is typically a court-appointed guardian, which is for the medical side, or a court-appointed conservator, which is for the financial side. How that comes about is whoever wants to do this for you, your interested parties, they have to petition the court to get appointed to act for you. It’s a long-term relationship until you don’t need that support and death for an adult. There are annual reporting requirements and continued supervision by the court, so that’s not a great option.

It’s terrible. Do you know what it is? It’s selfish. I’ve had people ask me to be the executor of their will. If someone asks me to be their medical power of attorney and I’m close to them, I’m going to say, ‘Yes,” and so on, but I might get thrust into this. I don’t want to deal with the government. I don’t want to have to write reports. You’re someone who is being incredibly generous, helping you with caregiving and helping you with these financial decisions. They’re going to end up probably having to do it anyway and you’re making their life more difficult. It’s both in your best interest and in the best interest of the people who care for you to spend the time, money, and energy to do this and do it right.

That’s correct.

Let me be the bad guy here.

There you go.

There are people who act as professional fiduciaries. They will act for you as an agent under a financial power of attorney or as an agent under a medical power of attorney. Especially on the medical side, you need to start that relationship early because, as you talked about relationship design, they want to get to know you and what you would want on a medical side.

I have a lot of clients who come in and say, “I don’t want to put this on any of my friends or family,” so I give them names. They start interviewing people and try to find the best fit. It may not come about for 10 or 20 years, so we have other default provisions on how to select someone if that person is retired and things like that. That’s also an option, but you need to start thinking about it earlier so that you can build a relationship with that person.

I’m so anxious. We don’t talk about these things. I suspect there are people reading whose jaws are on the floor as they contemplate this. If I hear you correctly, Louisa, I have my Money Amy. I could create a durable general power of attorney with her in which she is compensated for doing these things.

That’s correct. You can provide for compensation in the document.

If I wanted to, for example, absolve a friend or if I didn’t have someone who would be good at that.

Depending on what Amy’s role is. She said she was your financial planner?

That’s right.

We won’t act as anybody’s agent. We won’t do it because it’s a conflict of interest to be the planner for the client and become, “I could write myself a check,” bottom line. That’s a conflict of interest. We personally, in our firm, do not act as agents.

You could find a third person who specializes in this.

That’s correct. We do that a lot. Louisa and I work together a lot on cases where there’s another firm involved, a professional fiduciary, acting as the conservator because that’s handling the financial side of things.


That’s interesting. Let’s talk about wills.

This applies to married or single people. If a person dies without a will, dying intestate is the term. No last will and testament. A person who signs a will is a testator or a testatrix. If you don’t have one, you die intestate. What the law tries to do is determine what they think the majority of people would’ve wanted. If you die without a surviving spouse but you have descendants, then the law assumes that is where you want your assets to go. If you don’t have descendants, then it assumes that you want it to go to your parents. There was a change in the law.

When you say the law, is this state law?


It may be different for other people, but I assume in general, there may be some variance.

That’s correct.

I could be overspeaking, but Colorado law is very good, simple, and easy compared to other states.

I bet you New York’s a pain in the butt.

New York and California. I always use California as my, “Don’t die there,” example.

Also, you don’t want to get married in California. You don’t want to get divorced in California. You don’t want to get married in California. You don’t want to die in California.

Colorado compared to many other states is relatively simple. The intestacy law is state by state or country by country.

You need to know what the rules are.

That’s correct. You want to know what the rules are. It typically goes back up. If you have no descendants or no surviving spouse, it’s going to go to your parents. The change in the law is that it would go to both. If there were two surviving biological parents, each would get 50/50. If one of the parents didn’t survive, it went 100% to the surviving parent.

This change is still 50/50. The law assumes that you would want the descendants of the deceased parent, your siblings, to get those funds. It would go 50% to the surviving parent and 50% to the siblings. What’s interesting, and this is where a lot of people might be surprised, is it includes in the group of siblings the half siblings. If your parents divorced and 1 of your parents remarried and had a 2nd family, the law assumes that you would the 2nd family coaching to be treated the same as your full-blood sibling. A lot of people come in and say, “I don’t care what happens. I’m going to be dead.”

It’s your money still.

When you dig a little deeper, you might care a little more. The way to avoid having the state law apply is by doing a will.

First of all, the big takeaway of this is why leave it up to a bunch of strangers, especially politicians and legislators, to decide where your assets go after you die when you could very easily do it through a will? People use the word trust. What is a trust? Is there anything special about a trust for a single person?

A trust is a document in which you are creating a fiduciary relationship. You name a trustee and the trustee manages the money.

They’re like the executor of a will. That’s the equivalent role.

That’s right. For whoever the beneficiary is. There are so many variations on trust, but here, typically, what people are talking about is a trust that you create, you’re the beneficiary. You might be your own trustee as long as you have the capacity to do so. A lot of people say you have to do a trust to avoid probate.

What is probate?

Probate is the legal proceeding by which title to assets is cleared after death.

By a judge?

By the courts.

That’s correct. By the state administration. They said, “I don’t want to do just a will that’s going to go through probate to get everything settled. I’d like a trust as well.” That is one reason that people do them. In Colorado, it is maybe not as big of a concern.

It’s not California.

In California, everybody does trusts. Something that I do talk to a lot of solo people about is if you want a professional fiduciary or you want a bank or trust company to manage your money for you, the trust structure often provides a lot more protection for you during incapacity than a power of attorney is going to provide. It is another method for incapacity planning, especially when you want professional help.

This is getting very complex.

We strongly encourage the trust for solo people, or not strongly, but for the right client. The way I think of it is, “I’m managing all my money. I’m doing a good job. I’m benefiting from my funds. If I can’t take care of them, I want to have my funds in a structure where somebody could step in and do that for me.” If all your assets are owned in a trust, you don’t have to rely on that power of attorney document. You can say, “My friend, Julie, is going to step in and be my trustee when I can’t be my trustee.”

This is especially useful for people who have assets and have strong considerations for what they want done with them and so on. I have a reader’s question. Before I get to it, I want to ask a self-interest question. I want to have a fun will, Louisa. Would you be able to help me make a fun will where I carve off this amount of money and give it to a friend for this purpose? I have friends who don’t spend money on themselves. I want to be like, “I’m going to give them $50,000 to be able to do this thing,” or something like that. If I wanted to create a fun will, is that hard to do?

No. It’s the same as creating a boring will. You’re including specific distributions for specific individuals.

I can’t force them to use the money in that way.

That’s correct. Usually, I tell people, “You can make a request. You can encourage them to do that, but it’s not going to be legally enforceable.”

It’s legally enforceable that they get the $50,000, but if they use it for a trip around the world, I can’t enforce that.

We encourage our clients, and you will agree with this, to sometimes write a letter. Write a letter to your friends. Tell them about the party you want them to throw for you or tell them about the trips or the experiences that you hope they enjoy together.

I think about these will readings in the movies and stuff like that. There is something theatrical and fun to be done with that, I suspect, but I’m a little bit of a freak.

I am waiting for a client to ask for that because it’d be awesome. The reality is that doesn’t typically happen. We don’t gather all the family in a room.

Ballpark, in the United States, someone wants the basics, the medical power of attorney, living will, general durable power of attorney, and a will. How much of an investment are they looking for in terms of time and money?

We generally tell our clients it depends on the complexity. Your fund will is going to take a little bit more time to draft up. Count on anywhere from $1,000 to $5,000. It’s a big range.

That’s fine.

There are the DIYs and other options that might be less, but a good package of all of those documents is going to be upwards of $1,000.

If you started now, it’s going to take you a month?

We’ve experienced a little bit in this industry that the good fiduciaries, the good estate planning attorneys, and the good accountants are busy and are out a couple of months to get a meeting on the books. Start making your phone calls. The total time process could be anywhere from 2 to 6 months. Does that seem fair, Louisa?

I’ve had people call me, especially if they’re referred by somebody that I’m particularly close with or that I do a lot of work with, that they’re going into the hospital next week and they need a rush job. It can be done, but under most circumstances, that’s not how most people operate or what they need. Kirsten’s analysis is correct.

Your sense of what percentage of people do these things?

If they come through my doors, they all have of them.

100%. I’m going to ask this because I have a few readers in Colorado. Are you two available to help outside Colorado or are you only limited to Colorado?

Attorneys are limited to the states in which they’re licensed, so I would be limited to Colorado. I have clients that I can help find attorneys in other places.

We have no limitations. We’re authorized to do business in all 50 states.

I want to say that because I’m sure someone’s reading and being like, “I like this.I like these folks.” The reader writes, “How should singles select their executor? It’s a potentially huge job. Even good friends may balk at doing it. If they don’t know anyone who seems trustworthy enough, who should they turn to?” We already answered that part of the question. Let’s not talk about this with regard to the executor, but let’s talk about it more broadly, so medical power of attorney, trustee, etc. What are the characteristics that you’re looking for in a friend or family member for this role?

We’ll go back to what you were talking about on the financial piece, that term fiduciary relationship. In all of these relationships, when you act as the personal representative or executor of a state, when you act as the trustee of a trust, or when you act as somebody’s agent under a power of attorney, you are in a fiduciary relationship with that individual.

The considerations that I talk to people about maybe on the medical side are a little different. Someone who is able to make a decision that you trust their decision-making, if it’s going to be somebody who stands there and says, “I can’t pull the plug,” that’s probably not a great person to act as your agent under a medical power of attorney.

It should be someone who has some clarity and the confidence to be able to make big decisions. I’m guessing that one of the ways is if they’re good at making big decisions in their life, that’s probably a good indicator.

On the financial side of things, which would be a personal representative trustee agent, I always tell people to remember first of all that they can hire an investment advisor, a CPA, or an attorney.

Who’s they?

The person acting as the fiduciary. They don’t necessarily have to know how to invest assets. They don’t need to know how to prepare your tax return.

That’s a good point.

They can seek advice using your funds, the principal’s funds, to make sure they’re doing their roles correctly.

Can I designate that they have to talk to my Money Amy, or can I get them to agree to do that as one of those things?

I get this a lot. The way I typically draft is I say it’s a suggestion, because what if Money Amy retires? What if something happens in Money Amy’s life and it’s not the same relationship that you had with her? Also, in financial services, there’s a lot of turnover. People go to different institutions. You have an individual relationship with someone. I probably shouldn’t name a bank.

That’s okay. You have a suggestion. It’s not a requirement.

We see that a lot in the documents. You’ve been working with Money Amy. You’re like, “I’ve enjoyed my relationship with Money Amy. I would like you to continue working with Money Amy.”

That makes sense.

It’s then up to the agent or the personal representative to continue that.

Anything else that you should be considering for these different roles, the attributes of your friend, family member, etc.?

On the financial side, you don’t want somebody who’s bad with money. You want somebody who’s organized that’s going to figure things out, like, “This is when their tax returns are due. I need to put that in my calendar. I’m acting as this person would with respect to their finances.” You don’t want it to be somebody who’s not really capable of doing that for themselves. They’re not going to change because of a fiduciary relationship.

Would you add something?

If it was a traditional family, we encourage family meetings. For the solo person who’s naming all of these agents and personal representatives, have a group meeting.

Have a party.

Have a family meeting with your advisor and your attorney. Bring these people in. I love getting to know the next generation. A lot of the financial companies have you name a trusted contact. You may be seeing that on new account applications. I want to know who that trusted contact is even if they’re not named in your documents. If I try to call you and you don’t answer the phone for a couple of months, and you didn’t tell me you were going out of town, I might call your trusted contact and say, “Is everything okay with Peter?” Making sure that your advisors, whatever team is that you’ve put together to support you, know who your trusted contacts and your agents are is really important.

Is it all things equally better to choose someone younger?

I worked on a case. It has broken my heart because he is older than the person who passed away. It has been a struggle to get him in the office to sign documents. He was very capable, but it was tiring for him. You can hire a lot of advisors to help you through the process, but you still need to get in there and sign some forms. You have to think about that aspect of it.

That’s why I also recommend not to appoint an initial person. Go through your list of ten for which you are very fortunate. Most people do not have that many. At least three is what I try to aim for. Some people, we get to two and that’s all we can figure out. I try to draft language to put in a way to select someone in the future. Whether that’s going to work or not, it’s not foolproof. I want people to leave thinking they’re not going to come back and update their documents.

That makes sense. These people, what do they need? Your social security number, date of birth, address, or a list of where your assets are?

I don’t recommend that they have it. I don’t necessarily recommend that you start distributing all that information broadly while you’re still living, but I do recommend that once you’ve done the documents, let people know they’re named and where you have them. Put together a notebook that has that information, the social security number, birthday, and address information. You could do it online or keep it in a safe. If you don’t ever tell anyone where it is, then they don’t know how to step into your shoes.

Also, they have to know what the hard drives that need to be destroyed and the documents that need to be burned.

That brings up the digital assets. It’s a whole new world because that’s controlled by the terms of service of the provider. Colorado has fiduciary access to digital assets, but you can limit that. Do you necessarily want your sister to read those emails that you sent about the horrible trip that you took four years ago? You do need to think a little bit about, “How do I want to protect what happened during my life? The hard drives or whatever it is, how do I protect my privacy after death?”

People have kinky stuff in their life that they don’t want people to know about. One of the other things is, what about your social media accounts?

That’s what digital documents do.

On Facebook and Instagram, if people click on the terms of service, that’s what controls regardless of what you think you’re doing with your documents.

That’s right. I know I’m being cheeky, but this is good to bring up. This has been incredibly helpful. People have a to-do list. I want to ask a few more quick questions. One is, in your experience with aging singles, we’ve already identified some of the problems. You start to lose friends, family members, etc. You risk isolation. Older adults are at the most risk for loneliness, for example. We’ve talked about 1 solution, which is these 1-stop-shops that provide community as well as care. What are some of the other things as people plan their later years in terms of remaining connected in your experience working with clients?

One thing that I often talk to my clients about is even if you have retired or you’re no longer working in your initial job, try to stay involved in other things that you care about. The happiest clients I see post-retirement, I have some who get jobs as yoga instructors or some who are volunteering their time. A huge community involvement is really a great way to stay connected for whatever your passion is. If it’s the animals, go to the Dumb Friends League or a no-kill animal shelter and volunteer your time to help out with the animals. That’s what I try to encourage people to do.

There are two tracks that come to mind. One is you need hobbies and interests. Some of them can be solo, like, “I don’t think I’ll ever stop writing. I write alone,” and that kind of thing. That’s good. You’re like, “It gives me a reason. It will give me a reason to get up in the morning. It will keep my mind sharp. I’ll continue to contribute to the world in some small way,” but you’re isolated doing that even if you’re doing it in public at a coffee shop and whatnot.

The other one is what are the things that you’re doing that bring you in contact with new people, good friends, and family and also might contribute to the world? Thus, having meaning to be imbued with the social side of things. That’s really good advice. For most people, that’s work. Work does that for them. The nice thing about financial independence is you get to choose the people you do this with, which you can’t always do at work.

I’ve seen a lot of retirees or people getting ready to retire. A lot of universities offer adult education or enrichment classes. Maybe it’s a Zoom class, but maybe you get to go to the university and sit and listen to a free lecture in the afternoon. We have a lot of clients that take advantage of that, especially in the Denver area because we have so many great schools. It is a way to meet people, a way to learn something new, and a way to think about something differently. They’re not adult education because they’re usually a 1 or 2 class lecture series. Those are great ways to get out into the community and meet people.

My employer at CU Boulder, we have continuing ed classes. What’s really sweet about those classes is you have undergrads who take those classes too. You can be in a classroom with a 19-year-old and with a 77-year-old. That’s really exciting, especially for developing multi-generational connections there.

I had a client who had Alzheimer’s. He lived in a facility that was near the University of Denver. His daughter paid a college student $20 an hour to go play cards with him, and it was great. It was an interaction with someone younger. It was no stress. He wasn’t expected to remember this kid from time to time. They were playing cards. It was a great way to get that intergenerational interaction feeling.

That’s great. Two last things. What have we missed that we should have covered given this topic? Did we get the basics?

We’ve covered the basics. I tried to think through it ahead of time there. We talked about trust, and you said, “This is getting really complex.” We could get down to it to see more complex things.

We don’t have time for that, but that’s right. In any case, you’re going to need to do that with a professional no matter what.

We’ve covered a lot of it. This is going back to what’s your backup plan, whether it’s the documents or the emergency funds. You’re like, “Have I done my homework to research where I want to go live when I can’t live at home anymore?” What’s your backup plan? It is making sure that it is well-thought-out. It’s going to change. If you’re in your 30s, it’s going to look different when you’re in your 40s. It’s going to look different again in your 50s. Having an advisor, whether it’s your estate planning attorney, accountant, or somebody like me, to talk to and ask questions along the way is really important.

The Single Person’s Guide to a Remarkable Life | Kirsten Hollander | Finances And Estate Planning
The Big 100: The New World of Super-Aging

I agree. I’m optimistic by nature. I want to call back to the previous episode, the one with The Big 100 with William J. Kole. He said that one of the things that predicts super ages is they’re optimistic about the future. They believe that the future can be bright. I said to a student in class that when you get good at life, life becomes good. I do believe that. I don’t want people’s optimism to get in the way of planning for the worst, in a sense. There’s this expectation of the best and preparing for the worst element that comes with this kind of conversation.

You can’t be optimistic and carefree.

That’s right. Well said.

You need to be optimistic and a planner.

That’s right. It’s easier to be optimistic when you’re taking care of life.

I always tell people, “Do the planning and then hope that it never has to be used.”

“I wasted that $3,000,” would be a great thing to say.

That is the best-case scenario.

Let’s bring it full circle. We started with taking care of your emergency fund. That’s a very nice tactical thing to do. It’s a great thing to work towards. It’s tangible and so on. For the person whose mind is swirling and they have a bunch of notes and so on, what would be their next step, do you think? Is it a strategy thing where they sit down and think about their future? Is it to start researching their financial planner? If you could say the next most important step, what would you give to them? It’s okay if you two disagree.

If you don’t have a budget, sit down and create a budget for yourself. Look at where your money’s going.

I appreciate you saying that. I have this in the show where I talk about the foundational elements of a remarkable life. Wealth is one of them. Get out a sheet of paper or an Excel spreadsheet and put your assets in one column and put your liabilities in the other column. Sum them up, put a minus sign between them, and find out if you are on the positive side of that or the negative side of that. You have to figure out a budget if you’re going to make that more positive or less negative depending on where you’re at. Get a sense of your spending.

Get a sense of where you stand. I agree.

That’s great.

On the estate planning side, it’s the powers of attorney that I think are most important both in financial and medical.

That makes sense because an accident can happen at any moment.

That’s correct.

That’s good. I think about the near misses I have in life, like that person who cuts you off in traffic and you’re like, “I’m glad that didn’t turn out worse.”

That happens every other minute in Colorado when you’re driving on the highways.

It could be worse. You could live in California. You two are wonderful. You live busy lives. You have thriving practices. I appreciate you taking time out to talk about this important issue that is under-discussed in the world. I look forward to when this stuff isn’t as complex, but it is, so let’s all get good at life so life becomes good. Thank you.

Thank you.

Thank you.



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