“A classic early warning sign of cognitive decline and possibly dementia is losing the ability to manage your personal finances. That can lead to a host of challenges, if you are the daughter, son, wife, husband or partner of a loved one in this situation.”
Advance planning can address many of the tough issues that arise when handling finances for someone with dementia, says Forbes in its recent article, “Managing Finances For A Loved One With Dementia.”
Fortunately, there are steps to take in advance that may help make things easier. Consider the following pre-planning steps, best implemented before you or your loved one are diagnosed with dementia:
- Drafting a power of attorney can allow a trusted person to make your financial decisions when you are no longer able.
- Purchasing long-term care insurance, if possible, can defray some of the high costs of care.
- Drafting a health directive describing the kinds of medical actions to be taken in the event your loved one can no longer make decisions on their own can help ensure your wishes are carried out.
Managing finances for a loved one with dementia can be very difficult. Nobody relishes the thought of gathering around the dinner table, talking about the risk of dementia. But with average life expectancy on the rise, the chances are too high to ignore this problem.
The Aging, Demographics, and Memory Study by the National Institute on Aging found that 14% of Americans age 71 and older have some form of dementia. The Chicago Health and Aging Project estimates that nearly one-third of people 85 and older have Alzheimer’s. However, the real issue is that too few families will discuss the topic of managing money and deteriorating faculties with age. Only 25% of families surveyed discussed how their parents will be financially provided for, or cared for, as they get older, according to a 2014 study by Merrill Lynch.
When looking at people 50 and over, the survey noted that about 50% of those surveyed didn’t have a will, and only 40% had a health care directive.
A large component of estate planning is arranging your finances, so if cognitive decline develops, your caregiver can manage your money and help you maintain your quality of life.
One last thing, remember to take care of yourself too. Taking care of parents, while raising a family and attending to your own life can take its toll.
Reference: Forbes (October 31, 2017) “Managing Finances For A Loved One With Dementia”
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.