Don’t Wait to Make Critical Decisions

06_01_09_smallAnyone who knew Hal five years ago, when he was 66, would describe him as sharp, clever, and quick-witted. He had a knack for trivia and always answered more questions on Jeopardy than anyone else in the room. He always handled the bills, and made wise decisions when it came to investments and running his business. When it came to estate and incapacity planning, he and his wife, Sarah completed their documents when they turned 50, and they joined our Lifetime Protection Program every year since to ensure they are always up to date.

Lately, Hal, who has been stressed for a variety of reasons for quite some time, has become noticeably forgetful. Last time his daughter visited his home, she was alarmed to find unpaid electric and water bills piled up in his desk drawer. Had she gotten there a week later, he and Sarah would be sitting in the dark with no running water. Sarah already took him to see a specialist to be evaluated for dementia, and the doctor is convinced that it is his stress and getting older that is causing his forgetfulness, but will continue to monitor him.

In the case of Hal (not his real name) and many others over the age of 60, forgetful moments can be the result of growing older and/or chronic stress, sleeplessness, depression, and other ailments. Luckily, minor memory lapses that often occur with age are not always signs of a serious neurological disorder, such as dementia, but rather the result of normal changes in the brain as we age and/or experience the ailments described above.

Memory lapses, whether they are the result of dementia, old age, or something else, can still be worrisome for many reasons. A study at NIH and a recent article in the Wall Street Journal Marketwatch demonstrates how non-dementia memory loss can adversely affect one’s capacity to make sound decisions about important things, including finances.

The NIH study, entitled “The ability to decide advantageously declines prematurely in some normal older persons” tested 80 neurologically and psychiatrically healthy individuals split into two groups, one aged 26-55 and another aged 56-85. The groups were given a simulated real-world decision-making task, involving gambling. The results showed that the older group demonstrated decision-making impairment, in spite of otherwise normal cognitive functioning. According to the NIH researchers, “Our finding has important societal and public policy implications (e.g., choosing medical care, allocating personal wealth), and may also help explain why many older individuals are targeted by and susceptible to fraudulent advertising.”

According to the MarketWatch article, entitled “The Biggest Retirement Risk No One Talks About” by Howard Gold, ”A large percentage of people who live into their 80s — and there are more and more of them all the time — will suffer some form of cognitive impairment. I know this is something most of us don’t want to think about. But there are steps you can take earlier — probably in your 60s — to protect yourself, your wealth and your family.”

They say with old age comes wisdom. So, with all of the extra life experience and wisdom acquired through the years, why is decision making so impacted in otherwise healthy seniors who don’t have dementia? When it comes to decisions involving finances, Dr. Joe Verghese, a professor of neurology at Albert Einstein College of Medicine and chief of geriatrics at Einstein and Montefiore Medical Center in New York explains that “[a] lot of the cognitive functions or processes involved in financial decision making are located in the frontal cortex. Because of the cortex’s predominance throughout much of adulthood, we get better and better at investing until we hit our mid-50s, when we begin a slow, inexorable decline. As we age, it becomes more difficult to put complex information into context. “

So, what does this mean for you when it comes to making important decisions involving your health, your well-being, your family, and your finances? Many people delay estate planning, incapacity planning, and long-term care planning partly because it’s unpleasant to contemplate our own mortality, and partly because younger adults believe such paperwork isn’t necessary until they reach old age. However, failing to plan or waiting too long or until your cannot make sound decisions can have catastrophic consequences:

  • Incapacity planning: A common belief is that if we become unable to make decisions for ourselves, our family will decide what is best for us. This can lead to difficult and emotionally charged situations or your wishes not being met if you or a loved one becomes incapacitated and having to go through lifetime probate, which could easily be avoided with proper Incapacity Planning.
  • Estate planning: Estate-planning mistakes can be costly, even among those who are fiscally prudent. Any number of oversights can leave you vulnerable in the event of an untimely death. Others can seriously compromise the amount your heirs will inherit when you die. Read our blog post, entitled “The Five Biggest Estate Planning Mistakes” for more details.
  • Long-Term Care Planning: Nursing homes in Fairfax, Virginia and the rest of Northern Virginia can cost as much as $198,000 per year, while Fredericksburg, Virginia nursing homes and nursing homes in and the rest of Virginia can cost as much as $105,000 per year. It is important to protect yourself and your loved ones from having to go broke to pay for nursing home care, while also helping ensure that you or your loved ones get the best possible care and maintain the highest possible quality of life, whether at home, in an assisted living facility, or in a nursing home.

As you cans see, to ensure your wishes are met, it is important to start your planning while your mind is still sharp and your judgment is sound, so you are prepared in advance if a crisis occurs. If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact Farr Law Firm, P.C. as soon as possible at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to schedule your appointment for an introductory consultation.

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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