Preparing for Diminished Capacity

No one wants to think about a time when they may not be able to make their own financial decisions, but the truth is that we could all be facing this reality. Planning ahead for your future potential diminished capacity gives you the opportunity to ensure your financial objectives are protected and served even when you can no longer handle making financial decisions yourself.

Name a Durable Power of Attorney
If you are medically certified to be incapacitated, State government agencies can appoint a representative to handle your affairs but it is a long, cumbersome, and expensive process to have a Guardian appointed. Instead, establishing a durable power of attorney before you become incapacitated gives you the power to choose your own representative and clearly explain your goals, intentions and priorities. A Power of Attorney document should be drafted with the help of an attorney.

Points to remember about appointing a power of attorney:

  • You can choose a different person to act as your financial power of attorney than the one you choose to make your healthcare decisions or you can choose the same person for both powers.
  • It’s important to appoint a durable power of attorney because they will be able to continue managing your finances even if you become incapacitated.
  • Your power of attorney documents outline the scope of the POA’s authority in detail, so you can limit them however you feel is necessary.
  • Many states have developed statutory Power of Attorney forms for both legal/financial and medical that can be used without requiring the services of an attorney. However, keep in mind that these standard forms may not go into as much detail as one drafted by a qualified attorney.

Gather Documents and Passwords
It’s going to be difficult for your financial POA to take over for you if they have no clue what assets, policies and accounts you have or how to access them. Make sure you gather all your relevant documents and bills and keep them in a safe, secure location that the POA can access when (and if) the time comes.

If you have any digital assets or accounts, you’ll also need to include a list of user names and passwords for your POA. Make sure these are kept in a location that cannot be accessed during a theft in your home.

Establish a Plan with Your Personal Advisors
It is often the case that others may notice your diminished capacity before you realize it yourself. Have a candid conversation with your loved ones as well as your personal advisors such as your financial advisor, tax accountant, and attorney to discuss whom you want them to contact should they notice changes in your behavior or actions that may give them concerns over your ability to continue to manage your personal affairs. Keep in mind that confidentiality rules will limit their ability to share these concerns with others unless you provide them with advance permission.

At Kramer Wealth Managers, we can help you prepare financially for the possibility of dementia, Alzheimer’s and other cognitive problems. Contact us today.

This material is intended for informational purposes only and should only be relied upon when coordinated with individual professional advice. Neither Osaic Wealth, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.

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Adrianna Rocha

Client Relations Specialist

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240-439-6889 VP
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Adrianna Rocha joined Kramer Wealth Managers in 2021.

Adrianna is responsible for client experiences and service. As part of the customer service team, she strives to help and provide top-notch service to our clients. As part of her role, she communicates with clients through videophone, schedules client meetings, prepares and processes forms, and gathers information for our advisors.

Adrianna Rocha graduated with a Bachelor of Arts in Communication Studies from Gallaudet University in 2017. Before she joined our team, she worked in the customer service industry for nearly a decade. She excels in human-to-human relations and takes pride in not only her own accomplishments, but her clients’ as well. Adrianna enjoys chatting about her slight obsession with dogs, houseplants, essential oils, and food: especially Mexican food! She is also a proud fur-mama to her beautiful Aussie-mixed pup, Ziva.

Adrianna is not registered with Osaic Wealth.