When Jeff first got in touch with us, he wanted help with the money, but he also wanted to know how to do right by his wife.
Joyce and Jeff are in their seventies, with one adult child and two grandchildren in their twenties. For as long as either of them could remember, Joyce had looked after the family finances and had done a great job of it. Then, after a year or so of things not being quite right, Joyce was diagnosed with dementia. The job she had always handled easily now filled her with anxiety and dread.
On paper, they are in great shape. They own their home, they each have around $1 million in super (Joyce also has a defined benefit pension), and they hold $80,000 in shares and about $400,000 in cash. But Joyce had been the one keeping it all running.
Joyce’s approach
Joyce's system had served them well for years. Their cash was spread across 15 different bank accounts (yep, 15), with money flowing from one to the next in a way that made perfect sense to her. Jeff had never needed to get involved.
When Joyce's diagnosis made the finances too stressful for her, Jeff stepped up. He wanted to take it all on and keep things going exactly the way she always had, partly because it worked and partly out of respect for her. But after giving it a go, he found it was a lot harder than it looked.
What we discovered
A few practical problems came up fairly quickly. The flow of money between accounts was too complicated for Jeff to manage with any confidence, and he didn't really understand why there were so many accounts in the first place. He didn't want to hold the shares anymore. His super was still sitting in accumulation phase rather than paying him a pension, and he wasn't sure what to do with it.
Jeff was also struggling with how much to include Joyce in their finances now. He didn't want to add to her stress, but he didn't want to shut her out completely either. He came to us partly for an outsider’s opinion on what the right thing to do was.
Their biggest goal was for Joyce to stay in their home for as long as possible, and to be ready for aged care when the time comes.
Working through the options
Our job was to make things simple enough for Jeff to manage, without taking anything away from Joyce. Here's what we did:
Simplified their banking. We pruned the bank accounts right back, keeping a few in each of their individual names and two in joint names.
Sold the shares. Jeff didn't want them, and they were one more thing to keep track of.
Set aside money for the house. We put money towards equipping their home so Joyce can stay there for as long as possible, which was their number one goal.
Kept cash within easy reach. We made sure they have ready access to money for the aged care process when it's needed. That means accepting lower long-term returns in exchange for being able to get to the money quickly, a trade-off they were comfortable with.
Reviewed their super. We looked at the tax components of both of their super funds, which can make a real difference to what their family receives when super is eventually passed on.
Checked in with their estate lawyer. We worked with their lawyer to confirm their estate plan still fits.
Locked in a budget. We set a budget that gives them surplus income for the rest of their lives, so Jeff isn't left wondering whether they can afford things.
Set up ongoing support. We agreed an ongoing service arrangement so Jeff has someone to lean on as he takes over.
Keeping Joyce involved
Jeff came to us asking what the right thing to do was. Our view was that Joyce should stay as involved as she wants to be, and that the money side needed to be simple enough for Jeff to make that work.
As Joyce's dementia progresses, there's a risk she'll be shut out of the finances she ran so well for so long, simply because it's easier for everyone else. Our ongoing work with Jeff is set up to keep Joyce included in the process, so she keeps a say in their money for as long as she can.
Know someone like Joyce and Jeff?
If you work with a client whose partner has always handled the money, and a diagnosis or a change in health means they suddenly need to take over, we'd love to help. We can simplify things, plan for aged care, and keep both partners involved for as long as possible. Get in touch.
This case study is general information only and doesn't take into account anyone's objectives, financial situation or needs. Names and some details have been changed to protect our clients' privacy. Please seek personal advice before acting on anything here.
P.S. Want to read more client case studies? Start with James' Story about the challenges of deciding to put your parents into aged care, or Jacqui and Jim's Story about finally feeling ready to retire.