While it’s not technically too late to start setting up a plan for your client once he’s been diagnosed with Alzheimer’s, it’s not exactly ideal either. Further, studies show that financial decision-making ability reaches its peak at age 50 and begins a steady decline thereafter, generally falling off sharply by age 80. Importantly (and frighteningly) most individuals have no perception of this decline in their financial cognition. So, the earlier you can start putting plans into place the better, with age 50 representing a nice round jumping off point for the conversation.

Many plans hinge on a determination of when the individual in question lacks “capacity.” However, this term means very different things to different people. For some, it may be the moment their decision-making abilities start to slip, others might be half-comatose and still insist on their ability to manage their own affairs. Keep in mind, as mentioned in the previous slide, the client is unlikely to perceive any of this slippage, even if it’s plainly obvious to everyone else around him. It’s essential to work out what the bar for “capacity” is while the client is still at his best (or as close to it as time allows), so everybody, including any doctors who have to be brought in to make a determination, are working from the same standard.

“The first step we always take is to sit down with the family and help them accurately and honestly assess what sort of resources they can put forth towards monitoring the situation with family members or parents,” says Fitzgerald. He explains that the first question you should ask when a family member comes to you and asks how they can help is “What can you add?” Are they geographically located in the same area? Are they willing and able to help the client review his financial planning documents or bank statements? In a lot of cases where the answer is no, you’ll likely have to bring in more professional oversight.

Though family members can act as a valuable first line of defense, it’s important to remain vigilant in determining whether their motivations align with those of the client. A shocking 60 percent of abuse cases (financial and otherwise) are perpetrated by family members; of those, two-thirds of that figure are committed by adult children or spouses. “Many people think of elder abuse as some sort of Nigerian prince scam on Craigslist,” Fitzgerald notes, “but the reality is the majority of it is happening much closer to home.” Have some healthy skepticism of who the players are and of family dynamics. Often an objective third party from outside the family can offer insight and clarity that those closer to the matter may be incapable of.

Once you have a handle on where the gaps are, Fitzgerald recommends having clients set up revocable trusts (and ensure that they’re fully funded) to protect the client by “automating” some of the process. Fitzgerald explains “most common revocable trusts will have a clause to the effect of if someone has an impairment issue or is no longer able to manage their own affairs, you get a note from two different doctors and the trustee succession immediately changes.” The new trustee can take charge basically immediately, which is particularly efficient because you don’t have to go through a court process or difficult, confrontational issue with the client or members of his family. That being said, it’s imperative to have somebody in the trustee position that has the time and the resources to commit to properly serving that fiduciary role or all this planning could be for naught.

People who are put in a position of helping someone, whether they’re a trustee or not, are basically acting in a fiduciary capacity. Some are more prepared for this responsibility (and the potential criminal and civil ramifications) than others. If one advisor is acting from a position of commission-based selling, his interests may not align with those of the clients in certain cases. Fee and compensation structures play an important role in this determination. According to Fitzgerald, the most important questions are “How do you make sure that an elderly individual is sitting on the same side of the table as their advisor or the trusted person tasked with making sure that their financial affairs are well preserved and protected? Are there appropriate incentives for the individuals who are put in that spot to act in the interests of the client and not themselves?”

The vigilance required to monitor all of a person’s day-to-day affairs for any signs of neglect or abuse is staggering, and often simply too much for one advisor to handle. Luckily, by the time they reach such an advanced age, clients have likely accrued a bevy of other advisors — be they lawyers, estate planners, CPAs or insurance professionals — who each bring both expertise and mental bandwidth to the table. By embracing these other professionals, communicating with them and involving them in the planning process, Fitzgerald believes that you can create a “net” of sorts where each advisor is not only handling his own area of expertise, but there are often multiple people looking at most aspects of the plan, given the natural overlap between the professions. In this manner, the advisors create their own natural system of checks on the client, his family and even each other, as very little in the client’s life escapes scrutiny from multiple sets of eyes.