By Carolyn McClanahan | Forbes
A recent story I experienced involved the parents of a client – a couple in their mid-seventies who recently moved to be closer to their daughter and young grandchildren. Their original home was in an area that had been affected by a natural disaster. The devastation made it hard for them to get around their area and gave them a good reason to move. Their goal? They want to buy a four to five-bedroom home so family can visit and it would provide plenty of room for the grandchildren when they stay over.
What is wrong with this picture?
First, money is a slight issue. Although they have a small amount of savings, a pension, and social security, they don’t have the liquid resources to purchase a home of their required size that will be close to their daughter, even with a mortgage. Most of their assets are tied up in their properties in their previous location – they also own empty lots in addition to their home. If they sold all of these properties, they could afford the home they want. But is this still the right thing for them to do?
People age differently. There are old people in their fifties and spring chickens in their nineties. These outliers follow normal statistics – the bulk of us will have issues in our seventies and will definitely have problems in our eighties, but a certain percentage of people will buck the trend. Of course, too many people think they will be the lucky outlier.
Have you ever noticed how the older you are, the faster time seems to fly? There is a reason for this. When you are in your twenties, that decade from your teens to your twenties is the equivalent of half your life. When you are in your eighties, that decade from your seventies to your eighties is only an eighth of your life. Your perspective of time changes and time seems compressed. Looking back, time passed quickly, but going forward, we think ten years is going to take a long time. Our warped view of time often causes us to procrastinate – we think we’ll have plenty of time to make change.
I shared my concern about them buying a large home when statistically, their ability to physically manage such a property for long isn’t very good. When asked their thoughts on this dilemma, the father shrugged his shoulders and the mother announced, “I live for today!” They shared stories of family longevity and insisted they will be fine.
We didn’t get to discussions about when to quit driving or turn over financial caretaking to the younger generation. We did discuss the possible need for long term care at some point, and they acknowledged this reality. And the discovery that they have no estate planning documents in place opened the daughter’s eyes that she has a mess on her hands if she can’t get them to follow through with cleaning up their old life.
The daughter brought them in to see us because of her concern about them purchasing a large home, especially without the resources readily available. One of her complaints was her father’s reluctance to list the properties in their previous location. Our one accomplishment in that meeting was to verify they could not afford to buy the house they want without selling those properties and hopefully this will make him move forward on listing them quickly. Until then, they will continue to rent near their daughter’s home.
In this situation, we have to reluctantly bide our time. Who knows how long it will take them to sell the properties and what events could pop up during the process. Until then, we’ll gently push for them to complete their estate documents. If something happens to their health in the short term, their daughter will need to step in and that will be a nightmare if they don’t have the legal documents in place.
Making good decisions as we age is tough – we don’t want to face the truth and the aging brain prefers to avoid complex problem solving. This is why it is important to think through aging issues while you are young – by putting a plan in place early, your brain is wired for that default and you are likely to make better decisions. You will be safer and your family won’t be left scrambling to clean up a mess.
