Helping Families Protect and Preserve Assets

By: Jessica Kmetty

The World Health Organization notes that an estimated 47.5 million people currently live with dementia, a syndrome that affects memory, thinking, behavior and ability to perform everyday activities.* It can severely impact the ability to make financial decisions, and finding ways to help those with dementia manage their finances is critical to their health and well-being. These 5 tips can help families protect and preserve assets:

Find an Advisor with a Process

Work with a financial advisor that has a process in place to identify signs of dementia and steps that activate when signs arise. Waiting until a need or crisis arises to discuss dementia’s impact on finances and to create a plan can lead to confusion and hurt feelings.

For example, when we first meet with clients, we discuss the potential for diminished mental capacity occurring in the future and walk through our “sharing of information” process. This service is a protective measure we put in place for clients in the event that their requests or behavior become drastically different than normal or out of line with their stated goals and objectives. Major financial pitfalls may be avoided when someone is watching out for your financial well-being.

Engage in Conversation as a Family

Start conversations about aging and declining abilities early. These conversations are not only important for parents and children/close family to have, but also for spouses, as one spouse may decline in health while the other remains healthy and able. Having these discussions when everyone is in a healthy state means that all parties have a chance to share their wishes and be heard and may give everyone a greater sense of security and independence. If these conversations are uncomfortable for your family, consider bringing your advisor in to facilitate. We are frequently asked to help lead these discussions and ask the hard questions so family members don’t have to. Your advisor can act as a neutral party to help minimize family emotions.

Work as a Team

The stress on individuals with dementia and on caregivers can be reduced when a team is working together. Your financial advisor can help quarterback the members of your team, which may include other professionals, lawyers and healthcare providers, making it easier for everyone to stay on the same page.

Know Your Advisor’s Communication Skills

When your decision making skills diminish, you need an advisor who can help you remain engaged at a level that makes sense for you. As your ability allows, they may shift their communication style to meet your needs, including sticking to closed-ended questions, using full names and avoiding abbreviations in discussions, avoiding vague phrases and repeating things that may not be clear to you. They should also send meeting summaries after your discussions to serve as your reminder and give you something to share with caregivers, if needed. If your parent is working with an advisor, the advisor may include you in these conversations or meeting recaps with the client’s permission.

Discuss Ways to Stay Involved

When faced with dementia, having a plan for your money management is important, but that doesn’t mean you must relinquish control. If you have parents with dementia, you could consider a small budget or separate account they control. The amount would be one that would not cause any negative impact on their overall financial future while still allowing them to make all the decisions for the account. Little ways of staying active and engaged can be impactful.

To receive our free whitepaper, “Talking to Your Aging Parents about Money,” email your request to [email protected].

Source: [March 2015]

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.  

Published for the blog on April 12, 2016 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.