Preparing For The Future Incase Of Cognitive Decline
Health-related events pose a significant threat to the financial security of many older adults, surpassing concerns about economic downturns or inflation. Chronic illnesses affect a large portion of the aging population in the U.S., with approximately 78% of adults over 55 diagnosed with at least one condition such as diabetes, asthma, or arthritis, as reported by the CDC. Last year alone, 1.9 million individuals received a cancer diagnosis, according to the American Cancer Society. However, cognitive decline represents the most formidable risk to financial wellness and retirement stability.
As the aging population increases, so does the likelihood of encountering cognitive decline. The Alzheimer's Association estimates that 11% of adults over 65 in the U.S. currently live with Alzheimer's, with an additional 3% affected by related conditions. Moreover, the American Academy of Neurology suggests that 15% of adults over 65 suffer from mild cognitive impairment (MCI), a condition requiring compensatory strategies to maintain independence.
These statistics indicate that nearly 29% of adults over 65 may struggle with financial decision-making, with the likelihood of dementia or MCI increasing with age. Surprisingly, financial decision-making difficulties can manifest even before the onset of serious cognitive decline, with studies showing a peak age of financial decision-making around 53 years old. Given the inevitability of cognitive decline, proactive estate planning becomes paramount in safeguarding one's financial and personal affairs.
Simplifying personal finances and automating financial tasks can mitigate the risks associated with cognitive decline, ensuring that essential bills are paid on time and investments are managed prudently. Moreover, integrating durable powers of attorney and advance healthcare directives into estate plans empowers trusted individuals to make financial and healthcare decisions on behalf of incapacitated individuals, thereby avoiding costly and time-consuming guardianship proceedings.
Furthermore, incorporating trusts into estate plans can provide additional layers of protection, allowing for the management and distribution of assets in a manner that safeguards against financial exploitation and ensures continuity in wealth management. Irrevocable trusts, in particular, can shield assets from potential creditors and long-term care costs, preserving legacies for future generations.
Protected income strategies like annuities can offer a layer of protection by reducing the need for frequent financial transactions, thereby minimizing the risk of impulsive decisions, scams, and other financial pitfalls associated with cognitive decline.
Read the full news article by Kiplinger here.
As cognitive decline affects virtually everyone as they age, prioritizing proactive estate planning is essential for ensuring long-term financial security and peace of mind. At Monteforte Law, our dedication to assisting families extends beyond legal matters; it's deeply personal. Attorney Michael Monteforte's journey into this field was sparked by his grandparents' battle with Alzheimer's, propelling us to specialize in supporting families facing similar challenges. You can learn more about Attorney Monteforte's story here. Through our work with Alzheimer's patients and their families, we've witnessed firsthand the profound impact cognitive decline can have on financial security and estate planning.
We're dedicated to helping individuals and families navigate these challenges and develop tailored estate plans that protect their legacies and loved ones, even in the face of cognitive decline.
To learn more about how we can help safeguard your future and what your next steps should be, click HERE!