Our population is ageing rapidly, the more the baby boomer demographic retires. We knew this was going to occur, along with the reality that more retirees also will become incapable of making practical financial decisions.

 

 

To put a legal handle on this, we must understand that “capacity” is the ability to register information upon which good financial decisions are based. With an understanding of associated financial risks involved, we must look well ahead to the consequential future of every action that one takes on his or her behalf. That must also include pre-planning for the inevitable process of your own health declining.

What causes an incapacity to decide? With age, some people face health challenges such as the rapid onset of dementia or Alzheimer’s. Many other diseases such as a minor stroke can be symptomatic of quickly reducing or incapacitating mental capacity.

Consider that stress can be caused by bereavement, and cause fear and/or quick erratic decision processes related to finances. One’s cognitive sense of solid fiscal planning may erode with age, making it imperative that the nearer you approach retirement age the more important it is to have health and financial powers of attorney in place.

Consider talking to your lawyer and your financial advisor. Together they can make sure your investments and retirement will remain secure through any future unforeseen change in your decision-making capacity. Planning ahead is a measure to protect your future wealth and does not necessarily refer to or imply any state of your current cognitive health.