Family and Relationships, Healthcare, High Net Worth Individuals

At Global Advisers, our recent study shines a light on the criticality of early planning for cognitive decline—a topic many may not consider until it’s urgently needed. Our findings highlight the widespread underestimation of cognitive decline’s risks and the necessity for investors to preemptively address the potential for such decline.

Recognizing and Preparing for Cognitive Health Risks

Our research involved surveying over 2,000 investors, uncovering a common trend: a significant underestimation of cognitive decline risks. This oversight is concerning as early symptoms of cognitive issues might not be immediately evident, yet the financial repercussions can be substantial.

The Financial Implications of Delayed Planning

Our study delineates cognitive decline as a spectrum, from mild impairment to full-blown dementia. Interestingly, while many recognize the severe risk of dementia, lesser forms of cognitive decline often go unnoticed, despite their potential for economic impact.

Preparations like drafting living wills or appointing power of attorney are commonplace, yet fewer individuals take steps toward arranging future care or setting guidelines for financial control transfer. This gap underscores the reactive nature of planning, rather than a proactive approach which is crucial for managing this risk effectively.

Timing the Transfer of Financial Control

Determining the optimal time to transfer financial control is a critical decision for those facing cognitive decline. Our findings indicate a common consensus leans towards making this transfer post the initial signs of decline but before complete incapacitation. However, this timing is often misjudged, leading to substantial financial detriments.

Strategies for Investors and Their Families

To mitigate these risks, investors should broaden their understanding of cognitive decline, embracing the need for early planning. Identifying a trusted individual or advisor to take over financial responsibilities, and ensuring clear communication about these roles, is paramount.

Moreover, considering a surrogate who is both capable and possibly from a different generation can reduce the risk of simultaneous cognitive decline. Advisors can play a pivotal role, not only in crafting a comprehensive plan that incorporates cognitive decline considerations but also in facilitating discussions among family members, acting as surrogates, and connecting with local resources.

Embracing a Holistic Approach

Addressing the risk of cognitive decline transcends just legal preparedness; it involves engaging in meaningful dialogues with family, healthcare providers, and financial advisors. At Global Advisers, we advocate for a holistic approach to wealth and health planning, emphasizing the importance of early conversations and thorough preparation for the unexpected aspects of cognitive health.