When a loved one can no longer manage their financial affairs
When Sue’s planner noticed that Sue was becoming increasingly forgetful and tended to repeat herself in meetings, she realised that she would need to discuss this with Sue’s daughter, Elaine. Both Sue and Elaine had been clients at their financial planning company for some time.
‘How will I break it to my mother that she has to be certified as mentally incapable of managing her own affairs?” was Elaine’s response. She was devastated and felt overwhelmed by the weight of it all. Where to start?
Elaine decided to take over the administration of her mother’s affairs as her other sisters do not live nearby. Her already busy life became even more busy. Managing her own affairs and that of her mother’s proved to be extremely stressful. Paying bills, organising and managing carers and drivers, arranging meals, booking and attending doctor visits became the norm.
Elaine also had to take responsibility for Sue’s investment portfolio in addition to her own. Her planner encouraged her to consider handing the administration of Sue’s matters over to a professional administrator and made the necessary introductions. Elaine was reluctant at first, feeling that she was somehow letting her mother down; however, following her first meeting with the administrators, she realised that it would be in everyone’s best interest to engage their services.
Since then Sue has been moved to a retirement facility. Sadly, but not wholly unexpectedly, her mental state has deteriorated, so she requires full-time carers. Elaine takes comfort in the additional support offered by the administrator.
Sue is very fortunate in having a daughter nearby who is able to come to her aid. This is not always the case and having a conversation with your planner sooner rather than later is a critical part of your financial plan.
Prepare before the crisis
Penny is a client who has taken it on herself to look after her disabled mother’s affairs. “This handover of responsibility was organic, but I think, if personalities permit, it would be better to discuss these things with ageing parents before the necessity arises. Once there is a crisis, emotions run high, and you don’t know if the person will be in a fit mental or physical state to make such decisions.”
Perhaps open the discussion in this way: “As you are getting older, the possibility exists that you could have a stroke and not be able to talk or manage your affairs. It may be a good idea to sign a Power of Attorney together. Then, should the need arise, that would enable me to pay your bills and get what you need, without you having to fret about it.”
Encourage your children to attend at least one or two planner meetings with you to discuss plans whilst you are still mentally healthy and alert. It is an onerous and traumatic process for all parties concerned. Says Penny, “Considering increasing longevity and older people’s seeming denial about their stage of life and what lies ahead, with hindsight, I would have raised the subject much earlier about what would happen when my parents got older. I think it would have been helpful to introduce the idea of possible reduced independence and what strategies should be adopted if that were to occur. Perhaps even trying to get them to agree to go to look at different options at that time, so that they could see what they thought might work form them.’
Why not have this discussion, difficult as it may be, with your financial planner, so that you are equipped with the necessary information well before you may need it.
Article by Christina Forman, Certified Financial Planner and Retirement Specialist at Chartered Wealth Solutions. Read the first article in the series from both Christina: Plan for when you can no longer plan and her client who shares the implications of being a parents’ tax consultant and having power of attorney.