It’s difficult for anyone to admit physical or mental signs of aging. For those of us caring for elderly parents, it can be equally as difficult to discuss their aging process, especially when you suspect there may be possible diminished mental capacity. The decline of a parent’s mental or physical health requires family members to become more involved, and parents can be hesitant to admit any problems or that they may need assistance. Learning about your parent’s legal and financial affairs, and understanding their future desires and needs can help put a plan in place and make everyone feel comfortable when incapacitation or illness strikes.
Warning signs of diminished mental capacity in financial decision making include trouble with simple math problems, difficulty paying bills or making irrational purchases. Older people with diminished mental or physical capacity can be easy targets for financial elder abuse, which can occur when someone takes advantage of an elderly person to gain access to their financial or physical assets. Warning signs for elder financial abuse include reluctance to discuss financial matters, unusual account withdrawals or wire transfers, shifts in investments or items missing from the home.
With incidents of dementia, Alzheimer’s and Parkinson’s on the rise, these diseases present challenges when making financial or legal decisions, or planning for healthcare decisions. Before you start to notice any diminished mental capacity, it is important to talk to your parents about what they want their life to look like and what resources are available to you both. There are a few things you should discuss and/or make sure are in place for you and your parents:
- Locate financial documents for your parents and ensure they are in a secure location – documents like birth and marriage certificates, tax returns, bank and investment statements, insurance policies, list of contacts for financial and legal professionals, deed/title to home and vehicles, trusts, wills and powers of attorney
- Proactively discuss the variety of housing options and care in case of possible diminished capacity – senior living community, assisted living facility, in-home care or nursing home
- Proactively discuss difficult issues like going to the doctor and driving, when diminished capacity may become an issue
- Ensure they have crucial legal documents like power of attorney (allows an individual to make legal and healthcare decisions for another person), advanced directive (wishes for end of life care) and trust and/or will (estate planning document to show where assets go upon death)
Planning early and comprehensively can ease a difficult subject matter for parents and children so that everyone can live comfortably and have peace of mind. For resources on this subject and to learn more, please visit www.caregiving.org or www.eldercare.gov.
Disclaimer: Callan Capital does not provide individual tax or legal advice, nor does it provide financing services. Clients should review planned financial transactions and wealth transfer strategies with their own tax and legal advisors. Callan Capital outsources to lending and financial institutions that directly provide our clients with, securities based financing, residential and commercial financing and cash management services. For more information, please refer to our most recent Form ADV Part 2A which may be found at www.adviserinfo.sec.gov.