The Wall Street Journal, in "Voices: Consider Trusteed IRAs for Clients With Alzheimer's," reports that when individuals receive an Alzheimer's diagnosis, they should start having frank and open discussions with their loved ones about what it means for them going forward. Although it's a tough conversation to have, it can empower everyone involved by defining the needs and preferences of the family member who's been diagnosed. The conversation might include where these people want to receive care, who will manage their finances, how to care for their spouse, and how their estates will be passed to their heirs.
Many of those with an Alzheimer's diagnosis really are concerned with not becoming a financial or practical burden on their family. Loved ones can encourage them to see an elder law attorney to help them organize and designate their assets early, so that they will ensure appropriate distribution before they're not able to manage their money directly.
One option is known as a trusteed IRA. Unlike a traditional individual retirement account, this will lay the groundwork for a third party to assume fiduciary responsibility on the senior's behalf. That trusteed person can grant the senior's requests for future purchases and bill payments. For estate planning, a trusteed IRA permits the account holder to better manage where his or her funds will end up by designating a limited distribution schedule and chain of beneficiaries. Individuals with an Alzheimer's diagnosis can be assured that their children, upon inheriting an IRA, won't be able to spend the funds all at once or pass them on to another beneficiary.
You can help a loved one deal with his or her diagnosis through his or her financial planning. This will build a stronger foundation for a more secure financial outlook. This lets individuals with Alzheimer's lessen the stress about their financial future and spend more time with their loved ones.
Reference: Wall Street Journal (April 18, 2016) "Voices: Consider Trusteed IRAs for Clients With Alzheimer's"