Taking Charge: Early Stage Memory Loss & Advance Care Planning

Memory loss can refer to occasional forgetfulness or difficulty recalling information. Sometimes it is  a normal part of aging, but it can also be a symptom of underlying health conditions. Dementia is an umbrella term that describes various symptoms that affect memory, reasoning, and communication. Alzheimer's disease is a  specific disease that causes dementia, responsible for 60-80% of dementia cases. Not all memory loss is related to dementia or Alzheimer’s disease, but can nevertheless have a profound effect on loved one’s caregivers, family members and close friends. 

 Memory loss that disrupts daily life should be evaluated by a medical professional. There are often early signs of a more serious condition like dementia or Alzheimer’s disease, and prompt detection can aid in slowing or reducing impacts of the progression of a condition. Early signs may include:

•    Forgetting recently learned information or important dates and events.
•    Difficulty following a plan or working with numbers, like managing finances or following a recipe.
•    Trouble finishing routine activities, such as driving to a familiar location or remembering the rules of a game.
•    Confusion with time or place – Losing track of dates, seasons, or the passage of time. Forgetting where they are or how they got there.
•    Trouble understanding visual images and spatial relationships – Difficulty reading, judging distance, or distinguishing color contrasts, which may cause problems with driving. 
•    New struggles with vocabulary, stopping in the middle of a conversation, or repeating themselves. 
•    Misplacing things and losing the ability to retrace steps – Putting things in unusual places and being unable to find them later (accusations of stealing) 
•    Declining judgment or poor decision-making, like giving large sums of money to telemarketers, or neglecting personal care.

Memory loss touches everyone in  a person’s  life-circle, impacting the emotional, mental, and physical well-being of all.  One of the greatest impacts is financial, particularly if the diagnosis is a more serious long term health condition.  Expenses for medical care, home modifications, and long-term care often strain family finances, leading to financial stress.

Early financial planning for memory loss is essential to ensure that financial matters are handled responsibly if cognitive decline progresses. Here are key steps to take in early financial planning when memory loss  is a concern:

Get Financials Well Organized.
 
If you or a loved one is experiencing memory loss, start looking at both the current and future financial resources and needs of the individual in more detail. Collect all important financial documents, such as bank statements, investment portfolios, insurance policies, wills, deeds, and tax returns. List Assets and Liabilities, to create an inventory of all assets (bank accounts, real estate, investments) and liabilities (loans, mortgages, credit card debts). Start tracking current  income and expenses and make sure that the family knowns regular sources of income (social security, pension, annuities) and routine expenses, to understand monthly cash flow. 

If possible, reduce the number of bank and investment accounts to simplify management, keeping all important accounts and policies together in one place for easier access by caregivers as needed. Set up automatic payments for recurring bills to avoid missed payments as memory issues worsen. Ensure all income sources, like social security or pension payments, are set up for direct deposit. Working with a financial advisor or planner who is experienced in managing the finances of individuals with memory loss or dementia can be very helpful. They can help develop a long-term financial strategy, including managing investments and budgeting for future care.

Review and Adjust Insurance Policies

Review the person’s health insurance to determine what, if anything, is covered for  dementia-related medical treatments and prescriptions. This includes understanding Medicare or Medicaid benefits – there are specialist law firms that cover Elder Law and can assist with evaluating readiness for particular government benefits, if needed. If not already in place, long-term care insurance may be available to help cover future costs for in-home care, assisted living, or nursing home facilities.  Although this coverage can be expensive if not purchased well in advance of need, it is worth getting a quote to compare against planned out-of-pocket costs. Life insurance policies should also be reviewed to ensure they meet the person’s and family’s financial needs. Some life policies may have features that allow access to funds while the individual is still alive to help them cover long-term care costs.

Planning for Future Care Costs

Budgeting for future care costs involves extrapolating out the current known living expenses and income through the future, then adding a factor for  unexpected medical or caregiving needs by ensuring there are adequate funds in savings or investment accounts to cover future care expenses. As memory loss progress, there is a spectrum of options - cost of care typically includes arrange of stages and steps, from  part or full-time in-home care, to adult day services, then to  assisted living, or memory care facilities.  Private savings are most often used to pay for such costs, but it is always worth investigating the availability of  government assistance programs, such as Medicaid and Veterans Affairs (VA) benefits, which may help cover long-term care expenses. In many cases, strategic planning can be done with an Estate and Elder Law Attorney to help shelter private assets and save families costs on exorbitant nursing home costs, if done sufficiently in advance of needing institutional care.

Establish or Update Legal Documents

It’s crucial to set up or update legal documents early on, while the person still has the capacity to make decisions.  Durable Power of Attorney for Finances assigns a trusted individual as an agent to manage financial decisions if memory loss worsens. The POA should be “durable” so it remains in effect if the person becomes incapacitated. To ensure proper medical care is given, create or update advance healthcare directives, such as a living will and healthcare power of attorney, to outline medical preferences and appoint a person to make medical decisions, as well as to obtain medical records.

With regard to final arrangements at end of life, either a Last Will and Testament or a Living Trust can help ensure the person’s current wishes are respected regarding the distribution of assets after death, before memory loss causes them to potentially make poor decisions. Of note, a Living Trust may be useful to  protect assets and provide instructions for how they should be managed and distributed. It also helps avoid probate court and can simplify asset management. This can save thousands of dollars in Florida, where an attorney must be retained to shepherd heirs through the probate process. Your Estate Planning an Elder Law Attorney should help you confirm that all  beneficiary designations on retirement accounts, life insurance policies, and investments are up to date.

Take Charge of Life’s Transitions !

Memory loss can be progressive, so it’s important to revisit budgets,  medical assessments,  financial and legal plans periodically to make adjustments as circumstances change. Having open conversations with family members, lawyers and other  trusted individuals about financial decisions, the individual’s wishes, and the role they may play in the future can make memory loss less  stressful for all involved.
Taking these steps early provides peace of mind that finances will be managed responsibly as memory loss progresses, while also protecting the individual from unnecessary financial loss, and ensuring their care needs are met in the future.