Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
As a long-time financial planner, I’m seeing more and more clients reach, not just retirement, but their final years. An especially important issue at this stage of life is how to protect your financial resources from an unexpected threat – yourself and those closest to you.
One of my saddest professional experiences came recently when one of my long-time clients, a man in his late 80s with no immediate family and few close friends, was diagnosed with early Alzheimer’s.
Ernie was prepared for this. He had both a financial and health power of attorney in place naming his niece, who was also a beneficiary of the estate and lived out of state, as his agent. He also had signed a letter of direction giving us permission to contact his niece if we had any concerns about Ernie’s behavior.
What could go wrong?
At what proved to be our final financial planning review meeting, we asked Ernie to have the niece present so we could bring her up to date about his financial planning and investments. The niece didn’t appear to have a lot of financial experience or understanding, but that isn’t unusual. Neither did Ernie. Throughout the meeting, which seemed to go well, Ernie appeared cognitively sharp and present.
Shortly after the meeting, we received a notice from the custodian we use for our client accounts that the niece contacted them directly, instructing that we be removed from Ernie’s accounts and that she have full control of the funds. The niece never contacted us or gave us a reason for the termination of our services.
I was stunned. Yet ethically we were required to comply by turning over Ernie’s holdings to the niece, who clearly lacked the financial expertise to manage the portfolio. To complicate matters, we found out she had moved Ernie into a memory-care unit, and because of the COVID-19 lockdown, we were unable to meet with him to confirm that he was aware and approved of firing us as his financial planner.
