In estate planning, finding the right trustees can be a challenge

Dear Liz: My partner of 37 years and I have shared a revocable living trust for much of that time. It has become necessary to update our successor trustees, since one has passed away and the second is our age. It has been pointed out that we ought to name younger people who are more likely be around when the need arises. This is becoming the hard part. Both of us have a single sister but they are also seniors, so not the best long-term choice. Nieces and nephews live out of state and are not the ideal choice, either. I am wondering about designating this task to an accountant or attorney firm but have absolutely no idea how to make this happen.

Answer: Yours is a common issue for “solo agers” — people who don’t have reliable adult children who can take over in case of incapacity or death.

Naming someone younger does increase the odds the person will be able to serve when the time comes, but nothing is guaranteed. That’s why Los Angeles estate planning attorney Burton Mitchell urges his clients to focus first on naming the best choices, rather than eliminating people because of age or geography. He also recommends naming multiple alternates. Circumstances change, and your first choice may not be available when you need them.

You want successor trustees who are trustworthy, dependable and honest. They don’t have to be relatives: Friends or professionals may be good choices if they’re willing to serve. Jennifer Sawday, an estate planning attorney in Long Beach, urges you to ask first before naming a tax pro, attorney or financial advisor, since many are unable or unwilling to serve in this capacity for clients.

Professional fiduciaries may be another option, or you can look for professional or corporate trustees. Your local bank may offer trust administration services, for example. These options obviously would be more costly than a friend or family member. Sawday recommends consulting a knowledgeable estate planning attorney who can recommend trust officers or professional fiduciaries for you to interview.

Even if you opt for a professional to handle the financial side, you may prefer to have a friend or relative serve as your healthcare decision maker should you become incapacitated. In that case, geography may matter, since the person may need to get to the hospital quickly or spend an extended period advocating for you. Even here, though, it’s more important to name the right people, rather than necessarily the closest ones. You want someone who understands your priorities and who will fight to ensure those priorities are honored. Someone older who understands the concept of a “good death” may be more appropriate than someone younger who doesn’t. (Katy Butler’s book “The Art of Dying Well” has helpful information for this choice.)

If you don’t have enough people in your life you can rely on, there’s still time to turn that around. As a fellow solo ager, certified financial planner Carolyn McClanahan recommends building a mixed-age community. McClanahan says this means making “care deposits” starting in your 50s by volunteering and mentoring younger people.

“If you come from a place of giving, when you get older, that tribe is willing to look out for you,” she says.

Tapping into a Health Savings Account while on Medicare

Dear Liz: I’m on Medicare but I also have a health savings account with a fair market value of over $9,000. Am I able to spend this on prescriptions, eye care, etc.? I hate to waste this money. My wife passed away and it’s been sitting there for a while.

Answer: You can’t contribute to an HSA once you’re on Medicare, but you can certainly spend the money you’ve accumulated.

As mentioned in previous columns, HSAs offer a triple tax break in that contributions are deductible, the account grows tax-deferred and withdrawals are tax-free for qualifying medical expenses. Those expenses can include dental and vision costs as well as Medicare premiums.

If anyone other than a spouse inherits the account, the HSA becomes taxable so you’ll definitely want to spend that money while you can.

Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.