The Delicate Dance: Dealing with Dementia in the Family
I write this newsletter from personal experience, based on my own mother's journey with Alzheimer's Disease—and the road we have traveled with her over the past ten years. I call it the "delicate dance" because my personal and professional experience is that dementia in a loved one—and the financial implications of cognitive decline—can be one of the most difficult and painful issues for families to address.
According to the Alzheimer's Foundation, 5.4 million Americans—one in nine over age 65—are living with Alzheimer's Disease, the most common form of dementia. Alzheimer's was the sixth leading cause of death for Americans in 2016, killing more than breast cancer and prostate cancer combined. At age 65, women have a one in six chance of developing the disease in their lifetime; men at age 65 have a one in eleven chance.
The statistics are stark—and so, we've discovered, is the difficult reality of living with this terrible disease for both those afflicted and family members.
Mom's early signs of memory decline were text book: asking questions repeatedly in short time span, forgetting the names of common objects, leaving "reminder" notes on scraps of paper all around the house. We noticed that shopping and cooking was becoming more challenging, as was keeping up with bills and financial matters. She had trouble completing credit card transactions and could not calculate a tip at a restaurant.
Along with the forgetfulness, we noticed more extreme personality traits. Mom had always been fiercely independent—and proud of her ability to take care of herself and others. But as her cognitive abilities declined, her moods drifted more toward depression, anger, denial and paranoia. Her reasoning and logic became unreliable. Rational discussions about the future had always been difficult with Mom, but as the disease progressed, they became impossible.
As a son, it was emotionally gut wrenching to watch Mom slip away from us and become someone we didn't recognize. As a financial advisor, it was a very personal wake up call to the potentially devastating effects dementia can have on financial security—and I don't just mean the overwhelming costs of long-term care.
Mom became a financial liability to herself—spending money she didn't have, forgetting to pay bills, etc. We expected this and took steps to help her with day-to-day financial management. But what we didn't anticipate was how vulnerable she was to financial abuse by others—unscrupulous contractors, scammers targeting the elderly, and, sadly, family members taking advantage of her impairment. According to the National Adult Protective Services Association, 90 percent of elder financial abuse is committed by family members or other individuals who are known and trusted by the victim.
Unfortunately, our family's journey ended up with a court petition for legal guardianship to stop the financial abuse (an uncommon and expensive step that most families should not have to take). We were able to bring Mom to live with us while we researched long-term care options and sold her house. And eventually we found a caring memory loss facility that could provide the round-the-clock care she required as her health continued to decline.
Every family's journey is different dealing with a loved one's dementia—but all are difficult. While I don't have any magic solutions for easing the emotional pain of the disease, I can offer these four recommendations for helping prepare for the challenging times ahead:
1. Begin the conversation with adult children early
Author Tim Prosch addresses this topic in his book titled The Other Talk: A Guide to Talking with Adult Children about the Rest of Your Life (published by AARP and available at www.theothertalk.com). This isn't just about talking about dementia and how to deal with it; it applies to the entire range of issues that need to be discussed about the later years of life before a crisis happens:
- Planning for financial security when the future is uncertain
- Living independently vs. with assistance
- Handling medical concerns and decisions
- Communicating details about finances, legal documents and end-of-life wishes
For childless individuals or couples, you should initiate this conversation with other close family members or friends. The important thing is to make sure you plan for different scenarios and contingencies and share your thoughts and wishes with others.
2. Identify trusted individuals who can help when the time comes
Most of us have a pretty good gut sense of the family members and friends we can trust—and those who may not be reliable or may need help themselves. But aging and memory loss can blur and confuse these instincts.
As a financial advisor, I cannot emphasize enough how important it is to communicate to me in advance who you will be designating as your trusted contact(s) should anything happen to you that affects your ability to make financial decisions yourself. And if there are individuals who should not be privy to your finances, I need to know that as well.
Along these lines, we are encouraging clients to complete a Contact Authorization Form that authorizes me to reach out to a designated contact if I have any concerns about mental capacity or health status, based on our advisor relationship. Please note that this form does not give me permission to share details about your accounts or personal finances, nor does it serve as legal authorization for your contact to make financial decisions on your behalf (see note on "legal documents" below). It simply allows me to let someone who cares about you know if I notice any red flags that may need to be addressed.
3. Get your legal documents in order
Regardless of whether dementia is a concern, maintaining up-to-date legal documents is a standard part of financial and estate planning to help ensure your wishes are followed in the event of any form of incapacitation. These include:
- Power of Attorney - Designates another individual to make financial and other decisions when an individual is mentally or medically incapacitated.
- Power of Attorney for Health Care (also called a Medical or Advance Directive) - Designates another individual to make medical decisions about health care providers, types of treatments, care facilities and end-of-life instructions.
- Living Will - Specifies an individual's medical wishes (while living but unable to make decisions), including what level of medical intervention and life support may or may not be desired.
- Standard Will - Specifies the "executor" who will manage the individual's estate and wishes after death and the "beneficiaries" who will receive assets from the estate.
Some individuals may also opt to create a "living trust" for managing assets in the event of incapacitation, a topic that extends beyond the scope of this newsletter but one that we can discuss.
While it is technically possible (with the help of templates) to create your own legal documents, I strongly recommend working with an experienced estate lawyer and am happy to provide referrals to ones I know and trust.
4. Organize and simplify your finances
Life has a way of getting complicated—and our financial lives often reflect this. It is not uncommon to have assets scattered across numerous accounts from many different stages of life.
If you haven't done so already, an important part of financial planning in the later stage of life is to organize and ideally consolidate these assets. This not only makes it easier for you to track and manage your money—but it also eases the burden on the family members or other individuals who may someday need to help with financial matters.
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I am optimistic that we will someday find a cure for Alzheimer's—and, indeed, progress is being made every day toward understanding the disease and how it works. But until then, it's likely that the majority of us will have to confront issues related to Alzheimer's or other forms of dementia during our lifetimes.
If you have any concerns about cognitive decline in your family—or other issues related to aging—I am always available to discuss and share my personal experiences and professional opinion.
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