Managing Finances for People with Alzheimer’s

People with Alzheimer’s or related dementia often have trouble managing their finances. In fact, it could be one of the first signs of cognitive decline you notice. According to recent research from Johns Hopkins University, supported by the NIH’s National Institute on Aging, “People with Alzheimer’s disease and related dementias may start having trouble managing their finances several years before their diagnosis.” When somebody is newly diagnosed with dementia, we recommend having financial conversations early and often.

Having Money Conversations 

As cognitive decline progresses, many aspects of a person’s life become more challenging. As families begin to take on a more active role in managing their care recipient’s health and affairs, one of the most difficult topics to broach can be finances. While it can be tempting to put this off, it is valuable to talk to your loved one while they’re in the early stages of Alzheimer’s — before cognitive decline progresses. You should aim to have open and honest conversations with your loved one where you can learn about their financial landscape and they can share their long-term healthcare, financial, and estate wishes.

The idea of ‘money conversations’ can provoke stress, fear, and insecurity for everyone, making it an easy conversation to avoid. You may be resistant to discussing finances because you don’t want to hurt your loved one’s feelings or be perceived as greedy or controlling, or perhaps you are overwhelmed by the work it will entail.

Additionally, Alzheimer’s is known to bring out paranoia in patients. The National Institute on Aging explains, “Paranoia is a type of delusion in which a person may believe — without a good reason — that others are mean, lying, unfair, or ‘out to get me.’ He or she may become suspicious, fearful, or jealous of people.” As a result, your care recipient might be very resistant to having a conversation about their finances, let alone sharing access to and control of accounts. It is challenging to accept one’s own cognitive decline, and your care recipient will likely want to retain control over their finances long beyond when it’s advisable. While this is understandable, it’s important that caregivers tackle this head-on and protect their loved one’s financial interests.

While not easy, it can also be helpful to discuss decline benchmarks ahead of time. This will enable you and your loved one to come to a mutual, advanced decision on when the right time will be for you to take over certain financial decisions. Having this hard conversation now can prevent a lot of grief and confusion down the line.

Proactive Financial Planning for Alzheimer’s Caregivers

After an Alzheimer’s diagnosis, it’s important to organize your care recipient’s financial life. We recommend getting the following in order as soon as possible:

• Financial power of attorney: This will allow you, or another designated loved one, to legally make financial decisions on behalf of the care recipient. 
• List of all assets and debts: When it’s time to take over their finances, this will help you to make sure you’re not missing any important accounts.
• Login details for bank and investment accounts. At some point, it will become necessary to monitor transactions and take over paying bills and managing accounts.
• Freeze their credit: You can freeze your care recipient’s credit with the credit bureaus so they can’t take out any additional loans or lines of credit.
• Government benefits: Confirm all government benefits, such as social security or veteran benefits.
• Insurance policies: Gather policy details for any insurance plans, such as life insurance, health insurance, or long-term care insurance. 
• Advance directive: Create or update their advance directive and do not resuscitate order, reflecting any changes in their wishes due to the Alzheimer’s diagnosis. Ensure these documents are on file with your care recipient’s physicians.
• Estate documents: Ensure their will and trust documents are up to date and reflect their wishes. If they’d like to make any updates, it’s best to do it now before their decline progresses. Keep all of these documents on hand for reference. 
• Caregiver communication permission: Your loved one can give key professionals and financial institutions advanced permission to speak to you, their caregiver, as needed.
• Long-term care costs: Discuss long-term care plans, and figure out a plan for the associated costs.

Warning Signs Your Loved One Can No Longer Manage Their Money Alone

If your care recipient is in the early stages of Alzheimer’s or related dementia they may still be able to successfully manage their day-to-day finances — such as paying bills and making credit card transactions. Their independence should be encouraged and facilitated for as long as is appropriate. However, it’s important to maintain a close pulse on their financial activities, so that you can take over certain aspects as needed.

According to the National Institute on Aging, warning signs to watch for include:

• Trouble counting change, paying for a purchase, or calculating a tip
• Trouble balancing a checkbook or understanding a bank statement
• Unpaid or unopened bills
• Lots of new purchases on a credit card bill
• Strange new merchandise or purchases 
• Money missing from the person’s bank account 

Keep an eye out for these behaviors so that you know when it’s time to take over and manage a loved one’s finances. It’s in their best interest that you protect them from making any adverse decisions, and you will have peace of mind knowing that their money will be secure and protected.

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