The Director of Volunteer Programs at the Alzheimer’s Association, Stephanie Rohlfs-Young, explains that families shouldn’t let a diagnosis disrupt proper financial, estate, and retirement planning. She recommends several proactive and tactical steps that individuals and families can undertake to address issues related to cognitive decline.
Barron’s recent article entitled “Cognitive Decline Shouldn’t Derail Retirement Planning. Here Are Some Tips to Prepare Your Finances” provides some tips on navigating the financial aspects of cognitive decline. Let’s look at some of them:
Inventory. For budgeting and estate planning purposes, families should conduct a thorough inventory of the individual’s property and debts to create a list of those who have access to each account. Ask about and include online checking, savings, credit-card, and investment accounts along with insurance, retirement benefits, government assistance, and veterans’ benefits.. These can be neglected if they aren’t in paper form. Try to work with the individual in cognitive decline to ascertain this information while they can still be helpful. You don’t want to lose all those assets. This task can be challenging when children aren’t aware of their parents’ financial dealings. Families should also pick a lead person to be in charge of financial or legal matters.
Calculating future costs. A diagnosis of this nature is the time to figure out and plan for care costs that may include adult day care, in-home care and full-time medical care. These costs can vary widely, and many times families underestimate the amount they’ll spend on care. Families often fail to factor in out-of-pocket expenses that can add up, such as prescriptions not covered by insurance. When budgeting, families should see what insurance may be available and if they might add or amend coverage.
Leverage the skills of an elder-law attorney. Partner with an experienced elder law attorney to help get the family’s financial and legal affairs together. They can help with the titling of assets, trusts, powers of attorney, advance health care directive and more. For some, there’s also Medicaid planning.
Automate finances. Families should devise a plan for routine financial tasks, like bill paying. These are things that will eventually become too difficult for the loved one experiencing cognitive decline to handle. Consider signing up for online banking. That way, an adult child can have easy access to monitor the parent’s account. Monthly bills, including insurance premiums, can be set up for automatic payment to help minimize the possibility of errors.
Organize your important documents. It’s critical after a diagnosis of cognitive decline to name a health-care representative to allow healthcare decisions to be made by someone of the person’s choosing. You should also have a general durable power of attorney for finances in place. This allows the appointed agent to make financial and legal decisions in the individuals’ stead.
Reference: Barron’s (Jan. 11, 2020) “Cognitive Decline Shouldn’t Derail Retirement Planning. Here Are Some Tips to Prepare Your Finances.”