Have you misplaced your eye glasses recently? Or, have you recognized a face at the grocery store but been unable to recall the person's name?
Forgetting a name or where we put our keys are typical realities for many of us as we get older. For the 5 million Americans currently living with Alzheimer’s Disease, however, routine activities such as driving, cooking, taking medicine, or managing finances can have disastrous consequences if the disease isn’t noticed or addressed in a timely fashion.
A 2016 study published by Dr. Halima Amjad and colleagues, of the Division of Geriatric Medicine and Gerontology at John Hopkins, showed that patients with unrecognized dementia were nearly twice as likely to engage in unsafe activities than those that had been diagnosed. In fact, nearly a third of those studied with undiagnosed dementia were still handling their own finances, compared with only 12% of those that had been diagnosed.
According to the Alzheimer’s Association 2017 Alzheimer’s Disease Facts and Figures, the number of Alzheimer’s cases are projected to as much as triple over the next 30 years. Considering that 1 in 3 seniors die with dementia, it would be bordering on insane to not incorporate planning for cognitive decline in all our financial plans.
Perhaps the most at risk are those that are the most self-sufficient and independent individuals. In other words, those that most doggedly manage their own affairs may ultimately be the most prone to harming themselves. Add in other dynamics such as strong personalities and high levels of intellect that may make a child or spouse reluctant to address concerns, and you may have a recipe for disaster.
Take, for example, the Central Texas rancher client we had at my previous employer. He historically had been a bond and Bank CD buyer and had accumulated a nice nest egg over his 70 or so years. Even though he was assigned to an advisor in our local office, he typically conducted most of his business online or through our central call centers.
Then, one day, he showed up at our office with his wife. They were both confused and had questions about why their account had dropped in value. Upon reviewing the account, we immediately noticed that he had been trading stock options and had lost a significant amount of money.
Through the discussion with both the husband and the wife, it was apparent that they were both impaired in some way and probably not capable of acting in their own best interest. They had a son listed as the beneficiary on their account and when we reached out to him, he was very reluctant to challenge his father’s judgement. We were compelled to close the client’s account and get him out of those high-risk investments he had made, but the damage had been done.
This situation demonstrates one of the most apparent benefits of having a personal relationship with a financial advisor, accountant, or some other professional that knows you and that you interact with periodically. You don’t have to be a CFP®, CPA, JD, or MD to know the warning signs, though. According to alz.org®, the top 10 are:
- Memory loss that disrupts daily life
- Challenges in planning or solving problems
- Difficulty completing familiar tasks at home, at work, or at leisure
- Confusion with time or place
- Trouble understanding visual images and spatial relationships
- New problems with words in speaking or writing
- Misplacing things and losing the ability to retrace steps
- Decreased or poor judgement
- Withdrawal from work or social activities
- Changes in mood and personality
Have a Conversation Today
Discussing aging and its consequences can be difficult, especially if dementia symptoms have already set in. In a worst case scenario, you may have to go to court to have your loved one declared incompetent. While the conversations are never easy, they are better had sooner than later. Some of the tools and best practices to consider and discuss are:
- Power of Attorney
- Trusts
- Update beneficiaries
- Current will
- Living will
- Health care proxy
- Long-term care insurance
- Secure storage of legal documents, passwords, and trusted advisors
If you would like to discuss your plan, get in touch.
