Client Study:  “Anne”

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Age:  94 years old

Support:  Widow, no children or local family.  No POA

Health Status:  Legally blind, significant hearing loss & two other chronic conditions requiring pain management and a walker.  Aging in place & homebound.

Financial Resources:  SS & Teacher’s Pension

May 2018, After her most recent hospital discharge Anne requested assistance from a home health agency. As her taxes had not been filed and her previous CPA was no longer in business, part of her service request was tax preparation assistance. The home health agency referred her to Senior Checks & Balances (SCB) for guidance.

After an introductory phone call with a Senior Checks & Balances advisor and an initial in-home assessment, a work plan and calendar were established that Anne was comfortable with. The work plan included:

  •      Two sessions per week @ two hours each for two weeks
  •      Daily activity logs for Anne to review
  •      Filing system to organize documentation based on the following headers:

o   Tax documents

o   Income documentation (including SS)

o   Healthcare spending/expenses

o   Gifting/Charitable receipts

o   Real estate/tax info

o   Banking Info

Over the course of the sessions, Anne & her SCB advisor were able to capture and organize her 2017 tax documents, relevant receipts and other documentation. For those items not available or misplaced, SCB worked as Anne’s agent to obtain copies in a timely manner. Once the tax package was complete, SCB introduced Anne to a trusted CPA who worked directly with the IRS, on her behalf, to have penalties reduced, based on medical exemption and file her return.

While there are no concrete numbers on how often taxes are not filed due to illness or lack of support, the greater concern is that there are no current safety nets in the system to insure all filings and enrollments for seniors are done in a timely manner. Often, failure to file is not caught until the individual has passed away, or finances have reached a critical failure. At this juncture, the individual’s estate will be further compromised through audit and probate.

In 2019, the IRS will introduce the 1040SR which is available to any taxpayer 65 or older without significant income restrictions.  Similar to the 1040EZ, this new filing tool was developed for those seniors, like Anne, with relatively simple or uncomplicated finances, however, therein lies the issue. Senior finances are complicated. First, this does not further insure that a chronically ill senior with diminished competency will file. Also, tax code and deductions around senior living and healthcare are extremely complicated and require professional assistance to insure all deductions are captured appropriately. Only the standard deductions can be taken when using the 1040SR.

Despite popular beliefs, dementia is not always involved. With aging, the ability to perform or recall the steps necessary for tasks that were once routine, can diminish with any cognitive decline. Having the conversation early and often is the key to staving off financial errors or incidents. In the case where family is available to help once their loved one is no longer capable of managing their day to day functions, the focus remains on the physical health of the individual while the financial health of their estate usually remains a secondary concern. Installing safeguards and systems well before a critical life event, whether it be health or financial is key.

While Anne’s case is unfortunate, as she has no local family nor a designated POA, anyone can easily fall into the same situation, even with an extensive support structure around them. Any individual with declining health is best served by engaging a professional to oversee the “workflow” of daily finance, healthcare spending and financial management. A Certified Senior Advisor can establish baseline efficiencies and protections for the day to day finances and the overall estate as well.Further a CSA, serves as a valuable member of the individual’s support structure for continued autonomy as well as neutral point of contact for all family members.


Published by SrChecksandBalances

Native of Chicago's North Shore, Jill is the Founder of Senior Checks and Balances - a one on one consultancy that works with the senior community to insure financial security and efficiency. Jill is a graduate of Miami University (OH) with a degree in Economics, is a Certified Senior Advisor and member of the Association of Daily Money Managers.

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