4 financial steps to take when dealing with Alzheimer’s
If a person close to you has been diagnosed with Alzheimer’s disease, it may be time to address some serious financial questions. Due to the debilitating nature of Alzheimer’s and related forms of dementia on your loved one’s ability to make sound financial decisions, the sooner you can get financial matters in order the better.
Here are four important steps to take:
1. Look for signs of unusual financial activity
Discrepancies involving money can often be among the early signs of cognitive challenges for an individual. Red flags may include difficulty paying a proper amount for an item, leaving bills unpaid or making out-of-the-ordinary purchases. If you observe signs of a loss in judgment related to financial matters, additional action may be required.
2. Identify and designate a power of attorney
Many people are reluctant to hand control over of their personal finances. It’s important to have an honest discussion with your loved one and help them appreciate the importance of having somebody in a position to look out for their interests. Most important is to identify somebody who can be considered a trusted surrogate to help manage day-to-day money matters when that becomes necessary. An individual should be designated as financial powerof-attorney, authorized to sign checks, pay bills and help keep an eye on the affected person’s finances. The person designated with power-of-attorney can ease into the role, only assuming full control when it becomes absolutely necessary as the person receiving the diagnosis loses capacity to make rational decisions.
3. Make sure proper documentation is in place
An individual needs to be considered competent to complete or update legal paperwork such as wills, trusts and other estate planning documents. This should include an advanced health care directive that will indicate the levels of care that should be followed if health deteriorates. Also check beneficiary designations on any retirement and financial accounts as well as life insurance policies. With all relevant documentation, be sure the information and named beneficiaries are upto-date and that proper processes are followed. Check with an estate planning attorney for help.
4. Assess costs of care and how it will be covered
A top priority is to determine a strategy for how your loved one will be cared for, particularly if their cognitive abilities should deteriorate over time. Will specialized care be required, either in the home or in a nursing or assisted living facility? If so, are there resources or long-term care insurance policies in place to help deal with those costs? This will greatly affect any decisions on a care strategy. Talk to an elder law attorney about trusts that can be established to provide for care for the disabled individual while still protecting the family’s assets.
Be proactive in your approach Waiting too long to address financial considerations after an Alzheimer’s diagnosis can compound an already stressful and emotional time. Take steps to get on top of the situation as soon as you are aware that it could be a problem. Even establishing a plan for addressing these issues before a form of dementia is firmly diagnosed makes sense. Consult with your financial advisor for guidance on how to manage these challenging times.
Bronwyn L. Martin is a Financial Advisor Chartered Financial Consultant with Martin’s Financial Consulting Group, a financial advisory practice of Ameriprise Financial Services Inc. in Kennett Square and Havre de Grace, Md. She specializes in feebased financial planning and asset management strategies and has been in practice for 18 years. To contact her visit www.ameripriseadvisors.com/ bronwyn.x.martin