In finance, don’t delay involving heirs

In finance, don’t delay involving heirs

- in Finance
116
Comments Off on In finance, don’t delay involving heirs

wysondan

Today’s story began many years ago when a person was referred to me for financial advice.

The 70-year-old gentleman had a substantial investment account, accumulated over many years. To say this man lived miserly would be an understatement. Rarely in my life had I seen someone with so much money live in such meager circumstances. It is not unusual for financially successful people to be tight with their money, but this gentleman was an extreme case.

Last week: Wyson: What’s your financial attitude?

Over the years, we had many great conversations and while he continued to live like a pauper, his account grew into many millions. As his age stretched into his 80s, the man, like many, began to exhibit signs of diminished mental capacity. Financial advisors go through annual training to help recognize these situations, which sadly are becoming much more common.

Initially, I began to discuss with the man the need to bring his only son on board with his finances, and to prepare him in the event he could no longer manage his own affairs. He resisted strongly, not wanting his son or anyone else to know anything about his money. I tried numerous times to convince him that he couldn’t hide his personal information forever, that eventually his son as the only heir would become involved, and suggested it would be far better if that happened while the man was still coherent enough to have a good discussion with him about it.

Given the man’s strained and distant relationship with his son, he continually refused my requests to involve him.

More Wyson: Don’t ruin kids with inheritance

I also had a business relationship with the son over the years, but strict privacy laws prevented me from discussing anything about his father with him. Thus, I was caught in a very uncomfortable position. My elderly client continued to decline mentally and with the decline he made some rash and strange decisions. We would often get odd requests to transfer out large sums of money, which the man did not remember making when we called back to verify.

When dementia begins, it often comes and goes and sometimes this man was as smart as ever so he did not see the problem that I saw. He absolutely refused any recommendation to bring someone else in to help, which left our office in a difficult situation. Our hands were increasingly tied in our efforts to help him, yet we felt a commitment to continue doing all we could to protect his account, usually from his own poor decisions.

It is a sad reality that along with living longer comes the increased risk of facing dementia at some point. Before you reach the situation of this gentleman, please find someone you trust, family or otherwise, and involve them in your finances. Give them authority to make decisions. Give your financial advisor permission to share information with them. Failing to do so can bring an unfortunate end to a lifetime of otherwise careful financial planning.

Dan Wyson, CFP, is author of the book “21 Financial Myths” and owner of Wyson Financial, 375 E. Riverside Dr., St. George, 84790 — 435-986-9525. Securities and Advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment advisor.

[“Source-thespectrum”]