Basic Estate Planning Tips for Senior Clients with Dementia

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Financial advisors and other trusted professional counselors are facing increased need to work well with senior clients, both for their own success and to help this age group in need of support. There are 46 million Americans age 65 and older, and that number will more than double by 2060. But this group of the population also face unique and growing challenges. Today, one in three seniors dies with Alzheimer’s or another dementia. Most people hope and plan to live to a ripe old age but saving for the arrival no matter what happens along the way must happen during the journey. This challenge is why so many seniors need trustworthy financial and investment advice. If you’re helping clients with early or late-stage dementia with estate planning, here’s some of the basics you need to know.

1: Understand Competence and Consent

One question that is always front-of-mind when a client is losing cognitive ability is whether they really understand the decisions being made. Basic forgetfulness, like not knowing the date, their address, or a phone number, is an early warning sign of dementia. However, it’s not enough that they would be legally judged unable to care for themselves. As long as the client is obviously grounded in reality and knows basic details like what they own and who their family members are, they can still sign documents and make decisions. Understanding this is key to helping clients feel safe, supported, and respected, even when they blank on your name or the day of the week.

2: Meet Their Support System

Helping your client plan for the future means knowing what their needs will be, and who they will be leaving their estate to when they have passed. This is why it’s a good idea to meet key members of the client’s support system. This is especially true in situations where a power of attorney or a will have been established. In fact, in cases where dementia is a concern, advisors should ask if their clients have a durable power of attorney (DPOA) established. These give a family member  lasting permission to manage the client’s finances. A DPOA can be “springing,” which means it doesn’t take effect until a doctor says the person is no longer of sound mind. In early stages of dementia this kind of setup can be difficult to consider, so be patient with clients in this position.

3: Help Make Critical Decisions Non-Emotional

No one ever plans to get dementia or Alzheimer’s, but the number of people who do rose 123% from 2000-2015. This means when warning signs appear, the afflicted and their loved ones have a lot of emotions that can make future planning difficult. One of the most valuable roles an advisor can play is that of trusted outside party. Alzheimer’s and other dementias often mean a person will need more savings for healthcare or other needs. In those scenarios, it may be necessary to adopt a new investment strategy or even liquidate some assets to get cash. Thinking of letting go of a house or car may be challenging, but did you know   all or a portion of a life insurance policy can also be sold, even term insurance? That process, called a life settlement or viatical settlement, is what my company specializes in. If you have questions about how this option could work for your clients, take a look at some other resources on our site, or just contact me for a chat.

Case Study:

Barb and George have been married more than 55 years. Barb has been the primary caregiver for George the past few years due to his failing health. Barb passed away unexpectedly and the family had to move George into a nursing facility. The family sold George’s life insurance policy for $85,000 to help pay for the cost of the nursing facility.

Leo LaGrotte
Life Settlement Advisors
llagrotte@lsa-llc.com
Toll-Free: 888-849-0887
Local: 317-863-5936

Download our free resource, Causes of a Dementia Diagnosis and the Early Warning Signs You Should Know, to educate yourself to spot dementia before it arrives.

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