Having “the money conversation” can be one of the trickier parts of caring for a person with Alzheimer’s disease. In the early stages, your loved one will be eager to preserve their independence, and may be reluctant to hand over personal finance details. However, as the disease progresses, the person in your care will increasingly need help making money decisions.
In fact, money troubles may already be piling up without your knowledge. Research shows that people with early-stage Alzheimer’s often accumulate above-average amounts of debt and below-average credit scores — and these problems can begin as early as six years before the person receives a dementia diagnosis. Even worse, small mistakes often add up to major financial headaches before caregivers ever become aware of them.
For all these reasons, it’s crucial to get an overview of your loved one’s finances as soon as possible. Here are some tips for gathering the necessary info — and managing money responsibly on behalf of a person who has Alzheimer’s disease.
Collect details on your love one’s bank accounts, credit cards, assets and debts.
Search for missed payments, fraudulent charges and forgotten accounts.
If possible, get written legal consent to manage your loved one’s finances.
Create a long-term care budget, and investigate financial support options.
Collect details on your loved one’s bank accounts, credit cards, assets and debts.
Even if your loved one is already having money problems, they’re likely to be suspicious of any attempt to “take control” of their finances. You can encourage their cooperation by focusing on your concern about fraudulent charges and missed payments, and pointing out that you may be able to save them money — or even get some back.
Be sure to collect details for all your loved one’s bank and brokerage accounts, credit cards, retirement and Social Security benefits, and any loans, mortgages or other outstanding debts. Legal documents like mortgage papers, title deeds, living wills, last wills and power of attorney forms will also be useful down the road. Make sure you’ve got the latest versions of each, and that they’re signed and dated.
Search for missed payments, fraudulent charges and forgotten accounts.
As promised, your top priority is to identify any issues that may be triggering unexpected charges. Make sure all utilities, phone plans and credit cards are paid up — and that bank accounts have a positive balance, to prevent overdraft fees. If you discover any charges resulting from overdrafts or missed payments, it may be worth calling the bank or service provider to explain the situation, and ask a manager to waive the fees on a one-time basis.
You’ll also want to check credit card and bank statements for any suspicious-looking transactions. The unfortunate truth is that many scammers target people with Alzheimer’s — and once they’ve got your loved one’s account info, they may rack up thousands of dollars in fraudulent charges. Credit card companies will sometimes reverse these charges (and block future ones) if you call and speak directly with the fraud department.
Since some people with Alzheimer’s sign up for loans or credit cards without remembering they’ve done so, it’s also important to look through recent mail (and email) for statements from accounts your loved one may have forgotten about. If you find any, the simplest solution may be to pay off remaining balances as quickly as possible, then call to have the accounts closed.
If possible, get written legal consent to manage your loved one’s finances.
Managing money for a person with Alzheimer’s can result in serious legal headaches, unless you secure proof of consent in advance. A durable power of attorney document can name you as your loved one’s legal proxy — enabling them to maintain control of their finances for now, while giving you the right to take over when they lose their ability to manage money.
As your loved one’s Alzheimer’s progresses, they’re likely to become defensive about their forgetfulness, and may even try to cover up financial problems. That means the best time to talk about legal consent is right now. You can reduce your loved one’s anxiety by explaining that a power of attorney still keeps them in control for the time being — and as your loved one’s legal proxy, you’ll be better able to protect them against fraud in the future.
Create a long-term care budget, and investigate financial support options.
One of your most crucial responsibilities as a money manager is to plan ahead for the costs of long-term care. Keep in mind that your loved one’s needs will change as the disease progresses. They’ll need an increasing amount of one-on-one assistance in the later stages — whether they continue to live at home, or move to a residential facility.
If you plan to care for your loved one at home, factor in the costs of medicines, personal care supplies, and home safety modifications like access ramps and grab bars. Most of these costs won’t apply if your loved one moves to an assisted living facility; however, many facilities charge extra for services like housekeeping, laundry, and in-room nursing. Sometimes the most cost-effective plan is to combine multiple solutions — for example, hire a part-time overnight caregiver, sign up for a meal delivery service, bring your loved one to adult day centers and community care groups, and ask family members for help running errands.
As you put together your budget, make sure to look into caregiver tax breaks, medical coverage options, and financial support programs. Your loved one may qualify for Medicare and/or Medicaid, which cover many care costs — while long-term care insurance, life insurance, retirement accounts and veteran benefits can provide further assistance. Many care-related expenses are also tax-deductible; and you may qualify for the Household and Dependent Care Credit if you claim your loved one as a dependent.
Even after your loved one becomes unable to manage money, you can continue to help them feel independent by giving them small amounts of cash for daily expenses. Sometimes, the familiar feeling of carrying a (voided and deactivated) checkbook and debit card can be enough to set their mind at ease. And if the person with Alzheimer’s tries to pay with a voided check, don’t argue with them — just handle the payment yourself, then shred the check once it’s out of sight.
By taking a proactive approach to money management, and putting your loved one’s needs first, you’ll prevent many serious financial issues — in fact, you may even be able to reverse the damage from problems that have already occurred. Just keep your loved one in the loop as long as possible, and make sure you get written consent while they’re still legally able to provide it. Some careful preparation and planning will help ensure your loved one’s care needs are always financially covered, both now and over the long term.
