By FPA Member Steve Starnes, CFP®
Last Updated: May 3, 2010
You or someone close to you will probably develop Alzheimer's at some point. More than one in five women and one in 10 men will develop the disease. A person who has Alzheimer's will eventually be unable to manage his or her own affairs and will be entirely dependent on others for care. It is a progressive disease, which means a person's condition will never improve and will only get worse.
A person's last few years should be spent in a comfortable and respectful way, allowing family and friends to benefit from a loved one's company. A failure to plan for Alzheimer's, however, can be emotionally and financially devastating for patients and their caregivers. Proactive planning can significantly improve quality of life for people who suffer from Alzheimer's and for their caregivers.
Symptoms and Stages: Dementia is a common problem that develops primarily in elderly people. It is caused by the deterioration of blood or nerve structures of the brain, and Alzheimer's disease is the most common cause of dementia. Common symptoms of Alzheimer's include memory loss which affects daily life, mood changes and difficulty with familiar tasks.
At first, Alzheimer's symptoms are mild and usually only noticeable to close family and friends. People at this early stage have increasing trouble remembering names and dates and may often misplace things. As symptoms progress, memory continues to decline and people have trouble performing complex tasks such as paying bills and managing finances, and may seem more socially withdrawn. Eventually, a caregiver will be required to help with most acts of daily living (ADLs) such as dressing, cleaning, cooking, and perhaps even eating. Most people live eight to 10 years after diagnosis, though some may live much longer.
Planning Steps: The time to start planning is before there is a problem. This means you should consider the very real possibility that you or a family member may develop Alzheimer's. Now is the time to put together a contingency plan in case this ever happens. Preparation and planning will go a long way towards ensuring a person who develops Alzheimer's will be comfortable, and that his or her family experiences less strain and worry.
Consider the following as you put together a plan:
- Have a Conversation: The first step is to have a conversation with your loved ones about the possibility that you could develop Alzheimer's. You are much more likely to be taken care of the way you want to be if you discuss it with someone now. As part of the conversation, it is important to discuss:
- Who will make decisions for you when you are not able to?
- Who will be your primary caregiver?
- Where would you like to live?
- How you will pay for care if you need it?
- Find a Financial Planner: A comprehensive financial plan has many parts. A financial planner can help guide you through the process of putting together your plan. Here are a few things your financial planner will help you with.
- Simplify: Over the course of your life, you may have collected a variety of different bank accounts, investment accounts, insurance policies, etc. You may know where all of your money and assets are now, but if you start to lose your memory, you will lose track of things. If this happens, how will you or anyone else know where everything is? Handling everyday finances is a mentally challenging activity. Studies suggest a person may show noticeable decline in the ability to perform complex tasks such as driving, taking medication, and managing finances up to 10 years prior to a clinical diagnosis of Alzheimer's.
Simplifying your finances now will make it easier for you to keep track of your finances in the future. Additionally, if you develop Alzheimer's, your primary caregiver and your family will have a lot of responsibility taking care of you. You do not want to unnecessarily add to this responsibility by making it difficult to navigate your finances. Recommendation: Consider having just one or two bank accounts. Also, consider having your investment accounts all at one brokerage firm. This does not necessarily mean changing how your money is saved or invested, but simply getting everything organized in one place. - Legal Documents: The right time to update your estate and legal documents is before you have a problem. What if, today, you get into an accident and end up unconscious in the hospital? Who will make decisions for you tomorrow? Who will pay your hospital bills? Likewise, if you develop Alzheimer's you will eventually be unable to manage your own affairs or make decisions for yourself. You need to have the proper legal documents in case this ever happens. Recommendation: Basic estate documents include a Will, a Power of Attorney, and a Living Will or Advance Medical Directive. For many people, a Revocable Living Trust is also appropriate and is a great tool for incapacity planning. Your financial planner can help you coordinate with an estate planning attorney to determine the appropriate documents for you.
- Long-term Care: As you probably know, long-term care can be very expensive. Your financial planner can help you determine how you will pay for care and whether or not you need long-term care insurance. Your financial planner can also help you coordinate with an elder law attorney if protection of assets is a concern for you.
- Simplify: Over the course of your life, you may have collected a variety of different bank accounts, investment accounts, insurance policies, etc. You may know where all of your money and assets are now, but if you start to lose your memory, you will lose track of things. If this happens, how will you or anyone else know where everything is? Handling everyday finances is a mentally challenging activity. Studies suggest a person may show noticeable decline in the ability to perform complex tasks such as driving, taking medication, and managing finances up to 10 years prior to a clinical diagnosis of Alzheimer's.
- Early Diagnosis: Early diagnosis of Alzheimer's by a doctor can be very helpful. If you notice a family member or friend has early symptoms, encourage them to see a doctor.
- Communication Skills: People with Alzheimer's become easily confused and often have difficulty communicating with others. This can be very frustrating for everyone. The Alzheimer's Association and Family Caregiver Alliance have resources available to help caregivers and their families learn helpful communication skills.
The number of people who have Alzheimer's will increase 50 percent over the next 20 years. If you develop Alzheimer's, quality of life for you and for your family will depend on how well you prepare now. Most people put off important conversations and planning until it is too late. Of course, it's unpleasant to think about losing your mental abilities, and most people also find it unpleasant to discuss their finances with others. As a result, people fail to plan. A little focus and preparation now, however, will allow you and your family to focus on the more important things in life in the future.
FPA member Steve Starnes, CFP®, is a planner with The Monitor Group, Inc.
