One of my friends is a former fighter pilot. He loves to fly but as he got older it became clear to others that his skills were diminishing. Finally, his children made the very unpopular decision to take away the keys to his plane. He was initially very unhappy and it caused a significant amount of stress in the family, but ultimately my friend chose to trust the judgment of his children.
Modern medicine has been extending our lives beyond what was once thought possible. In just my lifetime life expectancy has increased by 10 years. One challenge of this longevity is that the science to extend the life of our physical bodies has progressed ahead of that needed to extend our mental health. In effect we are now running into diseases of the mind that were once less common because most didn’t live long enough to experience them. This trend will likely continue.
Years ago our office had the dual focus of helping clients plan for the management of their assets during life followed by the distribution of those assets after death. Increasingly we are spending more time on the growing middle section where individuals are physically healthy but no longer mentally capable. These are not always welcomed discussions and many would prefer to not have them, but my experience with real life situations compels me to insist this be part of any good financial plan. This new “bridge” can be a tough one to cross for everyone involved, including the financial advisor.
Failing mental health tends to come on slowly. It usually begins with frustration that once simple concepts have become more difficult to comprehend. As cognitive skills decrease, we often face the difficult task of suggesting to family members that maybe it is time to step in. Deciding at what point to take this action can be difficult, and there are few rules as to who should initiate those decisions. As a common practice now, we require all our clients to agree to a “trusted” person who we are authorized to speak to if we detect a person’s ability to make good decisions is becoming a risk to their financial health.
We had a dear client once who began giving away money to a stranger who she thought was her boyfriend. Working with her family we did all we could do to protect her assets from this predator, but she resisted and complained that she could do whatever she wanted with her money. She was right. She could do anything she wanted with her money until someone was willing to go to court and prove otherwise. No one wants to be put into this situation with a dear relative. Family relationships are strained to the limits when an older member is told they are no longer able to make their own decisions. Planning in advance about how the process will be handled can be very beneficial.
I consider myself still young, but my wife and I have accepted that this risk must be part of our own financial plan. We have visited with our children and have made agreements and committed ourselves to trust their advice if they believe our judgment is failing.
I have witnessed fortunes and families ruined as they struggle over difficult decisions that would have been better if made earlier on. All contingencies cannot be anticipated, but as you plan your financial future do the best you can to plan for the day when you may no longer be able to make the decisions yourself. Have early conversations with a trusted person or persons, and then be willing to trust their judgment when they ask for the keys.
Dan Wyson, CFP® is a long running national financial columnist, author of several books and CEO/Founder of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 – 435-986-9525 Securities and Advisory services offered through Commonwealth Financial Network®, member FINRA/SIPC, a registered investment advisor.