The article broaches a theme that appears to be getting more visible in the world’s wealth management community, spelling out how advisors can be alert for problems.
The challenges posed by an aging population in the form of cognitive decline are all too evident. Alzheimer’s and other diseases take a terrible toll on victims and families alike. There is already a lively, some would say heated, debate in Common Law jurisdictions such as the US and UK about lasting powers of attorney. Countries with different legal systems also confront the issue in different ways, and one tricky problem is whether issues around care and guardianship are recognized across national borders (in some cases, they are not). This publication has been tracking the subject of cognitive decline for some time, mindful that with so much focus on what so-called Millennials want, other concerns were being forgotten. The stakes are enormous: an estimated $30 trillion of wealth is expected to change hands as the Baby Boomers retire and pass away.
To address some of these questions FWR carries this article by Joanna Gordon Martin. She’s the founder and chief executive of Theia Senior Solutions, an elder care platform and advisory service working with advisors and families around issues of elder care and dementia. The editors are pleased to share these views and invite readers to respond. They can email email@example.com
Longevity is one of the greatest achievements of our modern-day era. Many older adults are leading long and active lives due to medical advances, improved healthcare and better lifestyle choices. However, with the benefits of longevity also come some risks - including diminished cognitive capacity.
In fact, according to the Alzheimer’s Association, the greatest known risk factor for Alzheimer’s disease is increasing age. Some 15 per cent of Americans over the age of 65 have some form of dementia and by the age of 85 that number can grow to as high as 50 per cent. Given these statistics, it is essential to understand more about cognitive declines such as dementia, to recognize the warning signs early, and become familiar when memory lapses are more related to “normal” aging.
Dementia is the name we give to the range of symptoms related to memory loss and decline in cognitive skills that affect a person’s ability to function. Many cases of dementia are due to Alzheimer’s disease, which is the most common form of dementia. However, there are other conditions that can contribute, so recognizing the symptoms and getting a proper diagnosis is critical.
Understanding dementia and cognitive decline as a trusted advisor is relevant because typically, you are on the frontline of seeing the warning signs. A trusted advisor may notice signs of decline 10 years before a physician's diagnosis. These cognitive changes can not only affect financial literacy and decision making but can also wreak havoc on family dynamics and relationships if not addressed well in advance.
In order to safeguard the advisor, the firm and the family itself, the necessary assurance and support must be provided.
Discerning between forgetfulness and memory loss as well as recognizing early signs of dementia is a vital part of managing or treating symptoms. The goal is not for a Trusted Advisor to diagnose the conditions, but rather to proactivity plan to address the issues of incapacity. Occasional memory lapses are not uncommon – and something many experience when quite young. For example:
--????? Trying to recall something that is on “the tip of your tongue”;
-- Calling a family member by the wrong name;
-- Forgetting where you left your glasses or keys;
-- Occasionally forgetting an appointment; and
-- Walking into a room and forgetting why you entered.
When forgetfulness begins to affect daily functioning, performance or safety however, there may be more going on. The following are cognitive lapses that are not a normal part of aging. And while these may seem minor, it is important to note that dementia is progressive.
Signs of mild cognitive Impairment include:
-- Unable to recall or repeat words that were said moments before;
-- Unable to identify family members;
-- Unable to clearly discuss or manage finances;
-- Frequently losing or misplacing several items;
-- Difficulty following and responding to a conversation;
-- Disoriented as to the day, month, season or year; and
-- Unable to recall a whole event, such as a family trip.
All too often dementia is written off as “just getting old”. While shifts in cognition can be part of the normal aging process, when the mind declines faster than the body it can lead to diminished capacity.
The onset of this condition can manifest itself in many ways, and difficulties with managing finances, making decisions and bouts of uncertainty are often common. Encouraging aging matriarchs, patriarchs and the broader family itself to establish an aging plan in advance provides them with a sense of control over their future and supports the desired independence of the older adults. If concerns of dementia are present, advance planning and early conversations are especially important because the gradual cognitive decline complicates decision making as the older adult continues to age. Starting the conversation early, before the age of 65, not only provides greater security to the family at large, but also introduces a concept that should likely be revisited on an annual basis as the aging process continues.
Deciding to “cross that bridge when we get to it” leaves families at risk, with less desirable options and outcomes not only for care, but for the management of family dynamics at a time of crisis. Adding elder care planning into the discussion of family governance or portfolio planning may seem uncomfortable at first, but it can not only protect client families from significant vulnerability, but also aide trusted advisors in enhancing their multi-generational approach and sustaining relationships across generations.
In the presence of dementia, determining whether a client has adequate capacity is critical. Consider the following examples can lead to a crisis situation:
1, An 81-year-old matriarch transfers $500,000 into her care worker’s bank account, to the dismay of her children;
2, An 80-year-old widow repeatedly calls the office to make withdrawals of $15,000 from her portfolio but does not recall making these requests; and
3, The family patriarch, age 70, has difficult recalling conversations, resulting in agitation, family turmoil and loss of confidence in their advisor.
Trusted advisors who notice any signs of cognitive impairment when meeting with clients should consider the following:
1, Reach out to the next generation in line for succession, executors and/or the designated emergency contact to discuss the matter and concerns. Are they too noticing changes in behavior?
2, Invite additional family members to client and business meetings and document discussions. These can be important to protect families against any risk of financial abuse;
3, Recommend families contact a doctor for a proper diagnosis. Early diagnosis is critical and can improve brain function, reduce symptoms and slow down the rate of decline;
4, Partner with subject matter experts on the condition to offer the necessary services, resources and support to help the family best cope. Elder care consultants have professional training in gerontology to advise people with cognitive decline and support for families. They can serve as a shortcut to navigating the myriad of resources and questions you may be facing.
5, Proactively plan and document a family’s care wishes while your client can still make sound decisions.
Dealing with this type of situation can be difficult for any trusted advisor. It not only requires compassion and commitment, but an understanding of the progressive nature of the disease and the importance of acting quickly to support and safeguard a family’s wealth. Trusted advisors that can help families navigate this difficult and often debilitating process will provide an immense benefit to all involved while deepening their personal relationship as a caring professional with multiple generations.