While many people think of dementia as a disease, it is usually defined as a group of common symptoms that affect a person’s ability to think, remember or function in social settings.
Alzheimer’s disease is the most common form of dementia and makes up about 60% to 80% of all cases with more than five million Americans currently affected by this disease. Alzheimer’s disease is the sixth leading cause of death and kills more people than both breast cancer and prostate cancer combined. Parkinson’s disease dementia affects more than half of patients with Parkinson’s disease. Medications may slow the progress and mitigate symptoms, but there is no cure.
Sometimes, it is difficult for family members to recognize the onset of dementia in a loved one. While many of us occasionally experience one or more of these symptoms, someone with dementia will have frequent episodes that range from mild to severe.
Symptoms of dementia include:
Dementia and Wealth Planning
Dementia can take a devastating financial and emotional toll on a family and add complexity to wealth planning. Costs for care can be very expensive. These expenses can lead a family to make hard decisions as to which assets to use to fund the care. Without proper planning, a healthy spouse can be left with little or no investments. Government care options for those with dementia tend to be limited to those who have few assets.
A detailed wealth plan serves as a guide to reduce confusion about which assets to use so that savings and investments are not completely depleted. It also provides direction for those who are responsible for managing day-to-day finances.
Wealth Strategies for a Loved One With Dementia
Wealth strategies for a loved one with dementia should include financial and healthcare directives. Of the various documents a family should have in place, an updated property power of attorney and an updated healthcare power of attorney are essential. These documents allow a designated person to step in and manage affairs in the event a loved one is not able to independently make decisions on their day-to-day finances or healthcare needs. Another aspect of power of attorney that is often overlooked is having the appropriate written instructions required to initiate the sale or transfer of assets, personal items and pets if a loved one is no longer able to maintain or care for these effects.
Keeping the Lines of Communication Open
Family members benefit from having open conversations about the plan to take care of their loved one and that includes fully understanding what is outlined in the legal documents pertaining to the loved one’s health and financial well-being.
That is why it is important to have someone attend all financial and healthcare meetings with the loved one, even if it appears that symptoms have regressed and the loved one’s cognitive skills have improved.
It can be challenging to choose the right person to serve in these situations. Moreover, it is not easy to be the person who may eventually take over such responsibilities. Most people will choose a spouse, a family member or a trusted friend, but they can decide to choose different individuals to act on their behalf for finances and healthcare directives.
Putting It in Writing
Everyone can benefit from having a sound wealth management plan that includes a property and healthcare power of attorney. For families who are caring for a loved one with dementia, it is imperative that proper documents are in place to ensure that the loved one is properly cared for throughout his or her life.
About Christopher Genzler, CFP®
Christopher Genzler, CFP® joined Forum Financial Management, LP in 2012 as a Financial Advisor. Prior to joining Forum, Chris served in advisory roles for Genworth Financial Investment Services, Citicorp and Terra Securities. With more than 30 years of financial services experience, Chris has developed many personal relationships with his clients to help them to accomplish their financial goals as well as acting as a mentor to new financial advisors just starting their practice.
Chris assists families with long-term care planning, college planning and retirement planning. His objective is to implement solutions that will benefit family members across generations. Recently, Chris has focused on the growing need for assistance with eldercare transitions for baby boomers and their parents. Chris also has experience helping business owners protect their assets, sell their businesses and develop a lifetime income stream. He serves as a committee member for Exploring | Learning for Life, a career education program for students age 14–20. Chris volunteers with the Alzheimer Association and the Mentoring Program at Elmhurst College in Elmhurst, Illinois.
Chris is a CERTIFIED FINANCIAL PLANNER™ professional. He earned an MBA from Keller Graduate School of Management in Chicago and a Bachelor’s degree in Finance from University of South Florida in Tampa.
Because a power of attorney is a legal document, it is important to consult an attorney. The content of this article should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.