Managing an elder’s journey late in life is not for the faint of heart. Ask a partner or family member – it is complicated, frustrating, rewarding, and exhausting at the same time. Given our rapidly aging population, we need to rethink our planning paradigm for older clients and actively shift to planning for a 100-year life. While a lifespan may be 100 years, people may find that their health span or the time they enjoy good health will not necessarily match their lifespan. The last decade of life may well be focused on health issues, medical coordination, and personal care needs. This mismatch of lifespan versus health span increases the risk for caregivers, family members, and advisors trying to assist older people.

With the rapidly aging population and dementia epidemic we need to alter our planning paradigm to respond to the demographics and issues in elder management. A more appropriate framework can expand our thinking about those problems by offering assessment options and different planning solutions.

Consider this example. In a recent conversation with an independent wealth advisor, we discussed some increasing risks advisors see with their clients. The following scenario is a composite of several cases:

An elderly couple in their 90s live alone and have no children. They have no relatives nearby and are each others’ Attorneys for Property. They have no Powers of Attorney for Personal Care. They have met with their advisors over the phone for the past few years due to the pandemic and other health issues. A hospital-based social worker called the advisor, saying he was the emergency contact for the wife in the hospital. The advisor was shocked to learn that he was the emergency contact. The client was about to be discharged home from the emergency room. Still, there were concerns about her ability to care for herself and her husband. The concerns were well-founded as the husband was starting to demonstrate signs of early dementia, increasing problems with walking without assistance, and was not able to procure groceries or prepare meals. He was home alone.

The risks are multifaceted. [1]

While advisors try to bring value to their clients and assist them with meeting their financial goals, lifestyle and health changes can have a startling and significant impact. The advisor may be called to help, and they can quickly find their role overlapping with their client’s health care, personal care, and home safety needs.

Due to conflict of interest, advisors do not normally act as Attorneys for Personal Care. They are also increasingly cautious if their clients’ needs, such as personal care needs, are outside their scope of practice or expertise. The risk to both the clients and to their advisors increases as care situations deteriorate and become more complex. Without a full assessment and understanding of the client’s care needs and environment, all parties risk undertaking inappropriate, potentially harmful solutions that are often more costly than necessary. An added risk is that family members may dispute any actions taken. The risks are even greater with issues around diminished capacity.

How can these risks be mitigated?

By the time clients reach their 70s, or earlier, if they have significant health issues, a basic lifestyle and care plan should be in place based on the current living environment. Just as there are in-house resources in the trust or wealth planning areas to support the advisors, care and lifestyle risks can be addressed by recommending an elder management professional. Collaborating with health providers and others, this person has the expertise to assess the person’s situation, identify care and quality of life criteria required, identify current gaps in services, look at costed options, and make recommendations to their attorneys for care and advisors to address potential risks.

Rethinking our planning paradigm for older clients and actively shifting to plan for a 100-year lifespan will prioritize the need to plan for that last decade of life when a person’s health span may be more focused on health issues, medical coordination, and personal care needs. By changing the paradigm and integrating lifestyle planning, it is possible to mitigate the risks for advisors and caregivers while better serving the needs of our clients.

The following blog will focus on more detailed approaches to managing risk as lifestyle changes take hold with older clients.

[1] https://ocro.stanford.edu/enterprise-risk-management-erm/key-definitions/definition-risk