More than 5 million people live with Alzheimer's, and that number, absent a medical breakthrough, could reach 16 million by mid-century. Medical research confirms one of the first things people have trouble with in the very early stages of dementia is managing personal finances. This means people can make very expensive financial mistakes, often before anyone notices there is a problem. I have seen this happen, and it is heartbreaking. One client came to me a few months after taking several hundred thousand dollars out of his IRA. This cost him $100,000 in taxes, and that is an expense most people can't afford.
Family members may notice that a loved one seems more disorganized than usual. Bills may pile up. The loved one may have difficulty remembering names and fumble for the right words. See a doctor if there are concerns. Alzheimer's and most forms of dementia are progressive. This means it will get worse over a few years.
Even before a diagnosis, it is important for people to discuss with their families how they would like to be helped. This includes who will be the primary caregiver and who will help with finances. According to a recent USA TODAY article, titled "Financial planning for dementia," a person with dementia often feels insecure that he or she will lose control and everyone else will tell him what to do, but conversations can help a person feel more independent and help families avoid misunderstandings.
Everyone should have a will, power of attorney and medical directive, and some find it helpful to have revocable living trust. Without these documents, a court may be required to appoint someone. This can be expensive, frustrating, and time-consuming.
In the course of the disease, a person may need help with a few acts of daily living and may have trouble communicating. At this point, someone else should take care of all financial matters, and it might be time to look at assisted living as the next step.
Healthcare costs for dementia patients can be substantial. It is very important to provide for the financial security of a healthy spouse. That is why it is a good idea to speak to an elder law attorney—he or she may be able to help a family protect some assets and income for the healthy spouse.
You should also consider the financial challenges associated with Alzheimer's disease and dementia, which can be substantial. Also, the choices for care can be overwhelming. An elder law attorney is a helpful resource to help you and your families manage costs and find the right care for your parent or relative.
Reference: USA TODAY (October 11, 2014) "Financial planning for dementia"