Joe got excited about Apple and ordered his advisor to buy 100 shares; his advisor worried about the out-of-character behavior but wasn’t authorized to speak to Joe’s family. Sally thought she had won the lottery and wired $50,000 to a scammer; her bank questioned the large withdrawal, but Sally approved it anyway. Dennis gave his caregiver cash and expensive gifts that totaled over $100,000, leaving his family with no way to get the money back.
Names and details have been changed, but these are real situations that, unfortunately, happen too often. Multiple studies have found that older Americans are more vulnerable to fraud and less likely to report losses to authorities or loved ones. Though no one (including us) wants to think about eventually losing their ability to make decisions, cognitive decline is a risk that we should all be preparing for.
As CERTIFIED FINANCIAL PLANNER™ Professionals, our goal is to always provide compassionate, proactive service to our clients and their families. As part of that commitment, we’ve developed the following tips to help protect yourself and your loved ones from the potential risks of mental decline:
Get Informed About the Signs and Symptoms of Cognitive Decline
Though it can be hard to distinguish cognitive impairment or Alzheimer’s from plain old aging, experts suggest that the following symptoms warrant follow-up with a physician:
- Experiencing memory loss that makes daily tasks difficult
- Demonstrating impulsivity and poor judgment
- Appearing overwhelmed by making decisions or completing complex tasks
- Forgetting important events
- Having trouble navigating familiar environments
If you notice any of these symptoms in a loved one, bring your concerns to a physician and ask other members of the family to be on alert.
Discuss Cognitive Issues as a Family and Make Advanced Preparations
One of the best defenses against cognitive decline is frequent communication and a “family protocol” for addressing concerns. Sit down with your loved ones to talk about your feelings about aging and discuss what you would want to happen if your family became concerned about your capacity. If you have elderly relatives, ask them about their current preparations and have them designate someone to check in regularly. Older folks can be very protective of their privacy and independence, so it’s critical to be patient, compassionate, and honest with them.
Get Your Paperwork in Order
A key part of your family preparations should be to make sure that you and your spouse have current powers of attorney that will allow a trusted friend or relative to step in and make decisions for you. If you don’t currently have up-to-date legal documents, we’d be happy to recommend an experienced attorney from our network.
It’s also very important that you have set up family protocols for how and when to start taking over a relative’s financial affairs. Consolidating accounts and simplifying finances can make this process much easier. We’ve helped many clients make these preparations and we’re happy to provide guidance to you and your loved ones.
How We Can Help
As CERTIFIED FINANCIAL PLANNER™ Professionals, we are always on the alert for warning signs of diminished capacity in our clients. However, because of privacy laws and our commitment to discretion, we may be limited in what we can do and say without your explicit permission. In order to protect our clients, we developed a process of communicating with trusted individuals expressly named by our clients in the event that request(s) or behavior is very different from prior request(s) and behavior or is out of line with stated goals and objectives and each individual’s investment policy.
We encourage our clients to help us help them by introducing their children and loved ones and giving us written permission to contact a trusted person about unusual behavior. We also strongly recommend setting up formal legal documents to allow that person to help manage finances in the event of problems down the road.
We know that mental decline is a sad, feared subject for most people; however, part of our job is to ask tough questions and encourage our clients to take the necessary steps to protect themselves and their loved ones from risk. If you have questions about making preparations for cognitive decline, please contact our office at 913.814.3800.
Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.
The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.
Originally published on November 30, 2015 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.