There are a number of challenges that arise with cognitive decline, with one major difficulty being the correlation between dementia and money management. As brain function decreases, so too does the ability to handle personal finances. Usually, that means loved ones must bear this responsibility.
Rather than fumble through the issues associated with dementia and money management, however, families, friends and caregivers can plan ahead to get a better handle on the situation.
Only one in four families discussed how their parents will tackle their finances or care as they get older, according to a 2014 report from Merrill Lynch and consulting firm Age Wave. About half of those surveyed didn’t have a will, and only 40% had a written health care directive. Yet the prevalence of Alzheimer’s is expected to increase rapidly over the next few years, which means such advance planning documents are becoming more crucial than ever.
Consider these tips for dementia and money management to prepare should anything happen in the future.
– Establish the basics: Have the basics for financial and legal strategy in place and ready for loved ones. Some necessary steps include selecting a power of attorney, creating a living will (including an advance directive on medical desires) and choosing someone as your health care proxy. Gather financial documents, as well, such as bank and brokerage account information, insurance policies, deeds or mortgage papers, pension and retirement benefit summaries and stock and bond certificates, among others.
– Determine what needs to be paid for: Think ahead to what care will cost as you age. Keep in mind ongoing financial duties, such as bills, benefit claims, tax return preparation and investment decisions.
– Have conversations: Communication is key when it comes to dementia and money management. Older adults should discuss their intentions and goals for their finances early – and often. Family members and loved ones must also converse among themselves about living situations, medical treatment and more.
– Consult professionals: As you navigate your finances and wishes for future care, it can be very beneficial to seek help from financial and legal advisors.