Making advance directives while healthy helps to mitigate risks
Financial advisory too often focuses on wealth accumulation and investment, and not enough on the risks that arise when one’s mental capacity slips
SINGAPORE’S rapidly ageing population has galvanised action by the government in support of numerous initiatives relating to healthcare and active ageing. The recent publication of a nationwide study backed by the Institute of Mental Health has some good news: Prevalence of dementia among those age 60 and above has dropped to 8.8 per cent, from 10 per cent about 10 years ago.
The study also found that stroke prevalence has fallen. And the proportion of seniors who met the criteria of dementia, but were neither diagnosed nor treated, dropped from 70 per cent in 2013 to 51 per cent in 2023.
Some factors explain this positive trend – longer years in employment, for example, and early diagnosis of chronic conditions that could lead to cognitive impairment.
Having personally seen the ravages of advanced dementia – my 90-year-old mother is unable to fulfil most activities of daily living without assistance since her stroke around 2017 – I have become almost hyper-aware of chronic conditions such as hypertension and high blood pressure that could lead to stroke, which could in turn cause dementia.
Recent research in the US is sounding yet more alarms relating to the failure to diagnose cognitive impairment early enough. An article in The Wall Street Journal highlights the greater financial risks seniors face when they are unaware of their own memory loss.
The loss in their retirement savings, either through poor investment decisions or scams, was far greater than the loss experienced by seniors who were aware of their cognitive decline.
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A study published by the Federal Reserve Bank of New York also found that years before a diagnosis of memory disorders, individuals’ average credit scores begin to weaken, and payment delinquencies rise, especially for mortgage and credit card accounts.
It found that two years prior to diagnosis of Alzheimer’s Disease and related disorders (ADRD), the probability of mortgage delinquency among borrowers is 11 per cent higher than the baseline. For credit card delinquency, it is 21 per cent higher.
The adverse impacts of undiagnosed ADRD include higher fees and interest charges due to payment delinquencies. These exacerbate the financial pressure on household finances, already strained by caregiving expenses.
In Singapore – apart from regular health screening and the pursuit of a healthy lifestyle and diet to fend off chronic diseases – legacy planning, which ensures that one’s values and desires are fulfilled, is a must.
There are three ways to make advance instructions, in anticipation of the time when one’s mental capacity may be impaired.
One is the lasting power of attorney (LPA), a legal document enabling a donor to appoint another person or persons as donee/s to make decisions on the donor’s behalf, in the event that a donor no longer has the capacity to make such decisions. An LPA is not confined to decisions on financial affairs including property and other assets; its scope can extend to decisions on personal welfare. Recently, it was announced that 233,000 individuals aged 50 and older have so far completed their LPAs.
Two other ways to make advance instructions are the Advance Medical Directive (AMD) and Advance Care Planning (ACP). The AMD enables one to refuse “extraordinary life-sustaining treatment” if terminally ill and unconscious. An ACP enables one to express preferences for the type of care consistent with one’s values, usually drawn up in consultation with loved ones and a healthcare team.
Financial advisory too often focuses mainly on wealth accumulation and investment, and not enough on the risks that arise when one’s mental capacity slips. Advance directives are an indispensable part of legacy planning – and not only for the wealthy.
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