When a loved one begins to show signs of cognitive decline, it can become difficult to emotionally reconcile who they once were with who they are becoming. They also will need more assistance with many daily activities—this may include their ability to handle their finances. While it may seem like an uncomfortable or awkward subject to approach, loved ones of the individual in cognitive decline should help develop a financial plan as soon as possible. Below are tips that individuals should take into consideration when planning for the future with loved ones with cognitive decline.
Start the Process as Early as Possible
It is critical to begin financial planning with a person whose mental faculties are declining as soon as possible. This increases the likelihood that the person in cognitive decline can still explain their wishes and wants about their future with their family. By having these discussions, family members assisting with the process will be confident later on they are making decisions that the person would have wanted. The loved one can then express their preference about these financial decisions, including who they want to manage their finances, how to use their money to pay for their future expenses and the bounds of these expenses. A great first step is executing a durable (financial) power of attorney.
Secondly, by starting the financial planning process as early as possible, it is more likely that the person in cognitive decline still has legal capacity over their actions—meaning they can comprehend the nature of their actions when finalizing these legal documents. If the person has reached a point where they cannot understand their actions and their wishes, then the family will likely need to go to court and begin a guardianship process, attesting to what the individual with cognitive decline would have wanted. To avoid a guardianship, starting the planning process early will save loved ones both money and time.
Plan How to Begin the Conversation
Talking about financial decisions and a person’s cognitive decline can be a difficult conversation. Therefore, loved ones should plan ahead about what specifically they are going to say and who will be involved in the conversation. Estate planning attorneys also advise families to list specific goals for the conversation: what do they wish to accomplish during this first conversation? Further talks may be necessary for everyone involved to be on the same page regarding future plans and decisions.
We advise our clients to start with a checklist. Our Family Document Planner is intended to start the conversation around important documents. It also allows the person with capacity issues the visual ability to easily determine what is “missing” and then you can make a plan to fill in the blanks.
Once these conversations have begun, contacting an estate planning attorney is critical. They can help work with the individual and their loved ones created advanced directives—legal documents that record the person’s preferences for healthcare and financial decisions.
Contact a Houston Estate Planning Attorney
If you or someone you know needs help creating a financial plan for a loved one in cognitive decline, contact the Houston estate planning attorneys at McCulloch & Miller, PLLC. This is often a very emotional and stressful time for families; our attorneys work with you to decrease this burden and make sure you have a plan in place that will make life easier in the future. To schedule a consultation, give us a call today at 713-333-8900.