Over the course of my 38 year career, I have developed very strong personal relationships with many clients and their families.   One of the most difficult issues that I encounter is when a client has suffered an obvious memory loss.  The impairment often deteriorates to the point where continuous care by professionals or family members is required and, in more extreme cases, results in the necessity to situate the client to an assisted living facility. 

While witnessing and experiencing the diminished mental capacity of a loved one is heartbreaking, this situation is exacerbated when legal and financial measures are not taken to transfer medical and financial responsibility to trusted family or friends.  It becomes imperative, then, to discuss the wishes of the client when they are of sound mind rather than reacting to a crisis when options become more limited and emotions may cloud their ability to make rational decisions. 

An example of a situation that frequently arises illustrates this problem.  Recently, we became aware of an 84 year old single client who had become increasingly forgetful and paranoid.  Without voicing my concern to the client, I asked for permission to reach out to her niece as a contact in the event of a decline in her health.   Since the niece was already aware of her aunt's deteriorating mental state, we encouraged her to move forward and push to assume responsibility for her aunt's well being.  Fortunately, I was able to act as a facilitator and legal procedures have now been enacted to confront this condition.    

For those who no longer have the capacity to make their own decisions, the issues to be addressed and resolved can be divided into two categories:  health care directives and financial and estate management.  Both issues require the expertise of an experienced and seasoned estate planning attorney who should be retained to offer advice on viable options and to draft and execute appropriate legal documents. 

A living will and health care proxy, as it is recognized in some states, records the wishes for medical treatment near the end of life.  Its value and urgency increases when diminished mental capacity is detected.  A health care proxy (or durable power for health care matters) grants authority to a trusted individual (agent) to make broader health care decisions.  The living will is focused on end of life issues and serves three primary objectives:  outline the extent of treatment used to extend a person's life, allow a terminal patient to die with dignity, and provide specific discretion given to the proxy. 

For financial matters, the simplest way to transfer responsibilities to a trusted individual is the durable power of attorney.  This document names an individual who is authorized to make financial decisions in the event of incapacity.  This document is intended to authorize the appointment of a trusted individual without court intervention.  For larger and, perhaps, more complicated financial situations, the creation of a revocable living trust may represent a better option.  Often the grantor of the trust and a responsible friend or family member are named as co-trustees so that the person can assume responsibility for the management of the trust assets in the event the grantor becomes incapacitated. 

As the baby boomers age, elder care planning has moved to the forefront as one of society's great issues to resolve.  Unfortunately, if we live a long life, many of us will suffer from diminished mental capacity.  It is incumbent for boomers to be proactive to not only preserve assets for their families, but provide them with the tools that allows them to make life altering decisions based on their quality of life and is not encumbered by a lack of planning.

Happy and Healthy New Year!

Clifford L. Caplan, CFP®, AIF®

Announcement:  As a result of the need for more space, this past August we moved our office upstairs and now occupy the entire 4th floor.   Many of you have visited our new office and the feedback on the upgrade of our new space has been very favorable.  As expansion of our practice is a primary goal, we are reaching out to all clients for your help in referring us to any family member, friend, or colleague where we may enhance their financial condition. 

Note:  For the 5th consecutive year, I am honored to have been named as a Five Star Manager.*  I greatly appreciate all of your loyalty and trust that has made this award possible. 

*2016 Five Star Wealth Manager Award, created by Five Star Professional. Presented in 12/1/15 based on data gathered within 12 months preceding the issue date. 2530 Boston-area advisors were considered, 632 advisors were recognized. Advisors pay a fee to hold out marketing materials. Not indicative of advisor’s future performance. Your experience may vary. For more information, please visit