The longer we live, the longer we are expected to live. At age 70 a male life expectancy is 15.4 years, or age 85.4 according to Social Security. But live five more years and life expectancy is 11.4, or age 86.4. According to statista.com, there were 92,000 people age 100 in the U.S. and they project that number to grow to 120,000 by 2025. An increase of 45%! As we grow older, our body and brain do not work as well as they once did and one of the first signs of cognitive decline is an inability to handle finances – paying bills, managing the checkbook, understanding investment products, etc. As financial planners, we are faced with the dilemma of respecting our clients’ abilities, but also being aware when they have a noticeable decline in mental acuity.

One way to manage the situation is to ask our client for a trusted contact (adult child, sibling, close friend) to whom we can legally turn if/when we realize that things have reached a point where we need to alert someone. That person cannot trade in the account under any circumstances. In the event one is being financially abused, we have the right to freeze an account for a short period of time.

Recently, the Vanguard Research Initiative surveyed approximately 2,500 adults age 55 and above about when they would know to turn to someone for help and even give up control. Many expressed a concern that they would delay too long which can result in mistakes that cannot be corrected. The main reason for delaying was an inability to give up control.

The development of dementia is not like a light switch, it is more like a dimmer switch developing slowly over time. As a result, many do not realize the decline that has occurred. A neurologist once told us that the brain protects itself by not remembering it cannot remember. Interesting concept. Just think about how unsettling life would be if all you could do is remember you could not remember. Drive you crazy, right?

Planning for dementia is part of your estate planning. When did you last update your estate plan? Have the people named in your documents already passed? What about beneficiaries?

Why not set up a one-hour complimentary meeting in our Clearwater or Tampa office to discuss your estate planning? Financial planning for your life and your lifestyle™.


The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and are subject to change.