Financial Planning for Alzheimer's

Build an Action Plan For Alzheimer’s

Creating an action blueprint can give you some control over the future as your disease progresses.

People who are newly diagnosed with Alzheimer's disease typically experience a tsunami of emotions: disbelief, fear, anger, depression, sense of loss. But after the initial shock, a person can assert some control over the future by creating an action blueprint that will guide the patient and caregivers as the disease progresses. “When someone is still in the early stages, it’s a gift to family members to prepare and to build support right away,” says Deb Bryer, early-stage coordinator of the St. Louis, Mo., chapter of the Alzheimer’s Association.

The couple has already chosen the continuing-care retirement community they’ll move to when Duncan can no longer care for McClatchey at home. He will live in the memory-care unit, and she’ll be in an independent-living apartment. McClatchey drew up documents that give Duncan the authority to make financial and health care decisions when he’s no longer able.

McClatchey, now 64, continues to play golf, and the couple go on regular outings. Besides joining a clinical trial, he speaks before groups about what it’s like living with the disease. His advice to others: “You have to continue to live your life and do things you enjoy. You have to fight back.”

Getting Connected

One of the first steps you should take after a diagnosis is to learn about the disease. For instance, by realizing that Alzheimer’s often progresses slowly, you may feel the confidence to set priorities, participate in legal and care planning, and share your diagnosis with others. This advice holds true for other progressive diseases that could lead to dementia, such as Parkinson’s.

Soon after a diagnosis, get in touch with the early-stage program at your local chapter of the Alzheimer’s Association, or ask your doctor or hospital for support services near you. Alzheimer’s patients and caregivers can also call the association’s 24-hour helpline, where staff can assist with a crisis and provide advice on everything from treatment options to living arrangements.

The Greater Illinois chapter gives a newly diagnosed individual and a family member the chance to meet with a “care navigator” and learn about local resources and tips for discussing the illness with friends. “A care navigator can give someone a sense of control,” says Peggy Rubenstein, manager of the chapter’s helpline and care navigation. “We give them a blueprint for getting their affairs in order.”

Your community’s Area Agency on Aging is also a good resource for finding services and professionals you may need over time. The agency can provide information on elder-law attorneys, adult day care, transportation, assisted-living facilities, respite care and geriatric care managers. (Find your local agency at To learn about the latest research and clinical trials, check out the National Institute on Aging’s Alzheimer’s Disease Education and Referral Center. The Alzheimer’s Foundation of America offers a helpline and state-by-state resources.

As McClatchey and Duncan found, newly diagnosed individuals and their caregivers can find solace—and great advice—by speaking with others in the same situation. The Alzheimer’s Association offers separate message boards for caregivers and for Alzheimer’s patients. Individuals with early-stage dementia can anonymously exchange views and advice on behavior changes, diet, medications and exasperation with conducting daily tasks.

Newly diagnosed individuals can meet one another at early-stage support groups. Caregivers share experiences and swap advice in their own groups. “Many with this disease feel isolation until they talk to others with the disease,” Bryer says. These get-togethers, she says, “help them feel normal again.” Her chapter conducts “meet up” events, including potluck dinners and specially designed tours of history and art museums.

Creating Your Action Plan

Alzheimer’s patients and family members need to create a team of experts to oversee and confer on caregiving, housing and finances as the disease progresses. The team could include an elder-law attorney, a financial planner, a certified public accountant and the physician who is monitoring the illness.

Also enlist a geriatric care manager, says Steven Starnes, a certified financial planner with Grand Wealth Management, in Grand Rapids, Mich. A care manager will assess the resources a person may need now, and then find housing, home health aides or other services as time goes on. “The care manager will coordinate with the financial professional by providing the costs and details on the options,” Starnes says. You can find a care manager at the Aging Life Care Association’s website.

Early on, a person will probably be able to live at home, either alone or with a family member, and with the aid of a care network. “This can be an informal group of friends, family members and neighbors whom you trust and are close to,” says Ruth Drew, director of family and information services at the Alzheimer’s Association. Network members can help with medications, bill paying and other tasks. The care group can stay in touch with the team of experts, long-distance family members or the local social service agency.

Rather than wait for a crisis, a person in the initial stages of Alzheimer’s, with the help of a family member or care manager, could start visiting assisted-living or memory-care facilities. When McClatchey and Duncan dropped in unannounced on the facility they eventually chose, she says they were pleased to see that “people were interacting and not just sitting in wheelchairs.” (Read “How to Choose a Memory Care Unit”).

A continuing-care retirement community may be a good option, especially for someone who lives alone. An individual in the initial months or years of the disease would stay in an independent-living unit, and move into an assisted-living or skilled-nursing unit as the disease progresses. Before signing on, ask a lawyer to review what’s likely to be a complex contract.

If you are newly diagnosed and still drive, create a plan that allows your caregiver or a physician to decide when your driving skills have deteriorated, Drew says. The Alzheimer’s Association website includes a “contract” that gives the appointed person permission to remove access to a car and to create alternative forms of transportation. “A person may or may not remember signing the form,” Drew says. “But you can say, ‘Here’s the plan to get you where you need to go.’ ”

Put a Legal and Financial Plan in Place

Be sure to choose a lawyer who understands the intricacies of elder law. You will need to draw up, or update, advance-planning directives quickly, says Kerry Peck, an elder-law attorney in Chicago and author of Alzheimer’s and the Law (American Bar Association, $130). Peck says he encourages a client and the family “to understand that time is of the essence. No one really knows how long the individual will have the capacity to sign documents.” If a person is considered too impaired to sign, a court may need to appoint a guardian to oversee the person’s affairs.

With a financial power of attorney, you designate an agent who will manage your financial, legal and tax affairs when you no longer have the cognitive ability to handle these tasks yourself. A health care agent will make decisions on your medical care when you no longer can. You can appoint the same person to serve both roles; be sure to choose back-ups, especially if you’re choosing a spouse or older friend.

It’s best to customize your financial power document so that it will address dementia-related issues. For instance, Peck says, the document should include the power to gift the unhealthy spouse’s interest in the couple’s home to the healthy spouse—a power not found in a typical power of attorney document. Including such a power could make it easier for the healthy spouse to sell the house and downsize to a smaller place once the incapacitated spouse moves to a nursing facility.

Financial abuse of older people with cognitive impairments is common, so select a financial agent “who loves you more than your money,” Drew says. A person who does not have trusted friends or relatives can appoint a bank trust department as the financial agent.

There are two types of financial powers of attorney. One is a durable power of attorney, which goes into effect immediately, and the other is a springing power, which becomes effective when someone is proved to be incapacitated. Peck recommends a durable power because a person could move in and out of dementia in the early and middle stages of the disease.

A living will defines a patient’s wishes for end-of-life medical care. But because a person with Alzheimer’s can be incapacitated for years, some patient advocates suggest that early-stage Alzheimer’s patients also draw up documents that communicate the kind of care they would prefer as the disease progresses.

Many states recognize “mental health advanced directives” (also known as “psychiatric health directives”). These documents enable people who are still competent but are diagnosed with dementia, or with a mental illness such as bipolar disease, to provide instructions on treatment preferences during periods when they cannot give informed consent.

End of Life Washington, an advocacy group, has developed a mental health directive that specifically addresses Alzheimer’s. A person who remains at home, for example, could give permission to hire an agency rather than asking family members to provide care. The individual could also designate the preferred setting—nursing home or assisted living, say—if family members can no longer manage care at home.

Such guidance can be a godsend to family members. “Caregivers can suffer so much guilt and trauma over these decisions,” says Lisa Brodoff, associate professor of law at Seattle University School of Law, who helped write the dementia directive. “All these issues can be discussed and planned in advance.”

McClatchey says that he drew up a similar directive that provides “step by step” instructions on the kind of care he would prefer at various stages. The document permits a nursing facility to give him drugs if he ever becomes aggressive, for example. “These decisions won’t be on Bobbie’s shoulders,” he says.

Because of the potentially huge costs of care, seek the help of a financial adviser who has expertise in long-term-care planning. (Ask your elder-law attorney for a referral.) Starnes says many newly diagnosed clients remain involved in financial decision-making, but he insists that clients take their designated financial agents to meetings. “The person can listen and help the client remember the conversation later,” he says. Starnes says he tells the client, “ ‘We’re not here to tell you what to do, but to make sure everyone is on the same page.’ ” (For more advice on financial preparation for cognitive impairment, read “Managing Your Money in Old Age”).

A financial planner will review available income streams for paying for care at various stages of the disease. Individuals who develop Alzheimer’s disease while they’re still working could qualify for disability coverage from an employer or an individual disability insurance plan, although benefits tend to end at age 65. You may be able to tap the cash value in your life insurance policy. And those with long-term-care insurance policies can offset some costs of adult day care, home health care, assisted living and skilled-nursing care.

To get a handle on potential costs, Thomas West, a partner with Signature Estate and Investment Advisors, in Tysons Corner, Va., relies on a care manager or neurologist to suggest care options as the disease progresses. “I want to know the best approach for keeping someone as independent as possible,” he says. For example, West could create a financial plan that accounts for a period in adult day care, while preserving funds for more-expensive care in a facility in later years.

Whether it’s drawing up financial plans or meeting with others who have the disease, it’s important to keep moving, McClatchey says. “The worst thing you can do is just lie down,” he says. “You have to be involved in your disease—you can’t be a bystander.”

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