If you have a loved one suffering from the disease, or one who’s at risk, it’s certainly important to consider the physical and emotional effects of the disease. However, the implications it can have on one’s finances are equally as important and should not be overlooked.
One common effect of Alzheimer’s disease is increased cognitive impairment over time. This diminished capacity can make tasks such as paying bills on time, budgeting and saving more challenging and can lead to the derailment of one’s financial goals.
Family members may not understand just how bad the mental decline is until there is evidence of unpaid bills, unexplained expenditures or overspending. At that point, you may not know how to step in without angering or alienating your loved one, which is why it’s important to familiarize yourself with common signs of Alzheimer’s to help mitigate the toll this disease can have on financial planning and in general.
If any of these occur, it’s important to act immediately. Start by opening a dialogue with family members and close friends; you may find that some of them have the time and ability to help with things such as monitoring bank and credit card statements for additional suspicious activity and intervening if concerns continue.
Recognizing the signs: What began as unopened bills can rapidly escalate to large, unexpected credit card purchases, depleted bank accounts and vulnerability to fraud.
The National Institute on Aging recommends designating a family member or trustee to monitor bank and credit card statements and intervene if concerns arise. Family members should be on the lookout for any inability to manage a budget, poor decision-making and a habit of misplacing items in unusual places.
In the early stages a loved one may feel anxious about losing control of his or her finances. Taking the wheel with a respectful yet firm hand helps ease the transition. Initial steps such as establishing spending limits on credit cards or cash withdrawals and helping to manage bills and expenses can help avert bigger problems.
Also consider obtaining durable power of attorney while the disease is still in the early stages so you can make financial decisions as your loved one’s condition worsens. This authority helps your family avoid court actions that could take away control over financial affairs.
In addition, gather your loved one’s important financial documents — including bank statements, insurance policies, wills, Social Security payment information, deeds — in one place.
Create a strategy: Longer term, it’s critical to establish an overall management strategy for a loved one’s finances. Set up a system to handle daily and longer-term financial decisions.
Also reach out to your loved one’s financial institutions to inform them of developments and gain proper authorization to checking, saving and retirement accounts, safe-deposit boxes or other assets. Financial institutions can help set up automatic payments for recurring bills and direct deposit of benefit checks.
Financial advisers can also identify money-saving services and other potential resources that prepare you for long-term care costs, such as a loved one’s extended stay in a nursing home.
You might want to consult with an attorney to advise on making necessary arrangements, such as a living trust for your loved one’s estate. In addition, a tax professional can steer you toward deductions for your role as caregiver.
The crisis of Alzheimer’s disease, dementia and other cognitive impairments affects millions of Americans, killing 1 out of 3 seniors, according to the 2018 Alzheimer’s Disease Facts and Figures report.
Families must be vigilant about looking for signs of money mismanagement that indicate impairment and take steps to limit financial damage. Financial institutions such as Edward Jones and other professionals stand ready to help.
John Beuerlein is a principal with Edward Jones and leader of the Edward Jones Older Adult Council. Jason Sims, AAMS, is a principal with Edward Jones in Broken Arrow.
The views expressed here are those of the author and not necessarily the Tulsa World. To inquire about writing a Business Viewpoint column, email a short outline to Business Editor Colleen Almeida Smith at business @tulsaworld.com.