Financial planning in the wake of a dementia diagnosis

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We recently received an invitation to share with you some excellent material on finances for the elderly – an invitation from Heidi Paris, Outreach Coordinator for an extraordinary website called Fiscal Tiger. While this site offers financial advice for virtually anyone, we found its coverage of issues of importance to dementia patients and their families particularly useful. Heidi has graciously given us permission to repost this information, so that’s just what we’ll do over the next few weeks.  

Financial Planning

After a diagnosis of Alzheimer’s or any form of dementia, it can be difficult to go through the steps needed to keep finances in order for the patient. It can be too difficult for some, and both patients and their loved ones may be in denial about the severity of the circumstances. However, it’s vital for someone to take control of the financial planning involved to keep the patient’s care a priority. Most of the time, initiating care for an Alzheimer’s or dementia patient involves organizing financial documents, taking a look into care costs, and evaluating their long-term care needs.

Organizing Financial Documents

Having issues managing finances is generally seen around the moderate decline stage of Alzheimer’s or dementia. However, every person is different. Some may see that aspect of cognitive function dip before or after this stage. For this reason, it’s important to start gathering financial documents as soon as possible. Ideally, it’s important to have these conversations while a patient is of sound mind, before dementia has progressed too far, so that all financial decisions are made with their preferences in mind, and all documents are collected with their help.

The first step in financial planning for someone with dementia is to get an idea of that person’s entire financial situation. This not only includes monthly income and bills, but also things like insurance, pensions, and bank information. Getting this information will vary depending on the cognitive standing of the patient experiencing dementia as well as your relationship with them and their understanding of the process. To begin, follow this checklist for financial documents to get organized in order to have a big picture of their finances.

• Monthly income information: Going through monthly income is a vital step in realizing how much the patient can afford in care.
• Stock and bond certificates: Finances aren’t just about income and bills, it’s also about investments. Looking into stocks and bonds will help to understand more of this person’s finances and if any of these need to be liquidated to pay for care.
• Social Security payment information: Social security can be a vital component of income for many seniors. It’s important to look into this payment information and understand the disability benefits.
• Retirement benefit summary: Gathering an entire retirement benefit summary will help to understand the benefits the patient has, as well as what they qualify for. The patient may have a few sources of retirement income you need to know about.
• Pension benefit summary: Does the patient have a pension plan? Does/did their spouse? Answering these questions will give you a better idea of this aspect in their overall income.
• Monthly bills: As with any budget, you’ll need to get an idea of all of their bills as well as their income.
• Outstanding bills: This might paint a more accurate picture of where they are with their disease. If they have any outstanding bills that need to be paid, or new bills that recently became outstanding, it may be a sign of their cognitive functions dwindling and will let you know if you need to step in with credit card use or other financial decisions.
• Insurance policies: Any insurance policies regarding health will be important here. From health insurance to long-term care insurance policies to life insurance, all of these policies will need to be gathered.
• Mortgage papers: Not only will mortgage papers be important in understanding payment obligations each month, it’s also helpful to know in case it’s beneficial for a patient to get out of a mortgage, or a reverse mortgage, in order to stay in long-term care.
• Deeds: Gather any property deeds in order to have an accurate idea of any assets.
• Bank and brokerage information: Gathering bank and brokerage information will be helpful in organizing all of the financials you can find including account information and balances.

 
For more information, please visit Fiscal Tiger’s page on financial and legal planning for patients and their families.

Next up: Care Costs: What To Plan and Budget For