6 steps to protecting your money from cognitive decline

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Many seniors make sure they have permanent medical authority to fulfill their desires when they can no longer guide health care providers. But only 39 percent have given a power of attorney to protect their money. While we’ve all heard horror stories about cheating or making big financial mistakes due to cognitive decline, we don’t think that’s going to happen to us. Spoiler alert: cognitive decline will happen to all of us at some point, so let’s start preparing for the inevitable.

To help you prepare, there is the six-stage Thinking Ahead Roadmap, Created by the Stanford Center on Longevity and the University of Minnesota and funded in part by AARP. These six steps will bring you the peace of mind, confidence, and relief that comes with feeling ready for the future.

Step 1: choose a trustworthy lawyer.

This is often your spouse, but you should also have a backup as your spouse is likely around your age. Your attorney should be someone who can do things like manage your daily expenses, monitor your investments, keep your financial records, and protect you from fraud. Look for someone who is trustworthy, organized, and good with money. Roadmap co-author Steve Vernon told me it was okay to have more than one attorney. For example, if you have two children, one can pay the bills and another can manage your assets. If you don’t have children, consider having a younger relative or good friend whom you can trust.

Step 2: organize your financial information.

Start by making a financial inventory that includes all of the assets you own and all of the debts you owe. List your income, including social security or pension. Then make a list of the bills you pay regularly, such as: B. Utilities, Loan Payments, and Subscriptions. It is important that you have a list of all of your passwords that you keep in a safe place. Then try to simplify it – do you really need all of these accounts? Do your lawyer a favor and clear out your finances.

Step 3: start a conversation with your prospective attorney.

You could start by saying something like, “I respect your work ethic and how well you are doing with your own finances. So I want to ask if you are willing to help me manage my money if I ever find it difficult to do it alone. “

Tell your attorney that you are fine, that you are just preparing for a future opportunity that may have someone to fill in. It could take your attorney some time to process what it might mean for you to take on this role – or even if they choose to. So if they seem a little baffled or unruly, let them know that it’s okay to think about it and that you can pick up the conversation again later.


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