How Advisors Can Help Clients Navigate Cognitive Decline

Financial mismanagement, whether due to declining cognitive abilities or exploitation, can have severe repercussions for individuals and their families.

Legal and Social Safeguards

The older population’s vulnerability to financial scams and exploitation necessitates robust legal safeguards.

Elder financial abuse is alarmingly common, comprising an estimated 30% of all substantiated elder abuse reports.

This calls for a proactive approach in setting up legal frameworks like powers of attorney, living directives, and detailed estate plans well in advance.

Preparing for incapacity issues ensures that a person’s financial and personal affairs are managed by trusted individuals, thereby preserving their dignity and autonomy even as they lose the capacity to make these decisions themselves.

The Great Wealth Transfer

This generation of aging individuals is also at the center of the largest intergenerational wealth transfer in history.

As baby boomers begin to pass down their life’s earnings, it’s critical that advisors elevate the importance of having clear and enforceable estate plans for their clients.

These plans play a pivotal role in protecting a person’s assets, preventing financial disputes among heirs, and ensuring that their wishes are respected and executed as intended.

The intersection of aging, cognitive decline, and financial management requires a multifaceted approach involving medical, legal, and social strategies.

It is essential that advisors take proactive steps to establish strong legal and financial safeguards for their clients.

By planning ahead, we can protect the financial security and personal dignity of those affected and significantly reduce the stress on their families and caregivers.

Ari Brojde is the co-founder and chief executive officer of Estateably, an estate, trust, and incapacity accounting and administration platform provider.