Dealing with dementia: 5 ways to plan ahead financially

It took us a while to realize there was a problem with my aunt. At first, she would just forget people’s names and once at a dinner party she buttered her hand instead of a roll. We finally realized how bad things had become when she wandered away from her apartment and turned up disoriented at a local shop. When we took her home and opened the door, we knew she was unable to take care of herself.

We Canadians are enjoying longer, better lives than ever before – but we’re also facing growing challenges, particularly the decline cognitive ability that can occur as we age. According to the Alzheimer Society of Canada, one in 20 Canadians over age 65 and one in four of those over age 85 are affected by Alzheimer’s disease.

Dealing with finances and investments can be particularly hard for someone struggling with dementia. And that’s where loved ones often need to step in – before any major financial damage is done. The thing is, that can be really tough to do unless the right tools are in place ahead of time. The good news is, there are things you can do to protect yourself and help your loved ones out in case something happens to you – it just takes a bit of planning. Here are a few steps:

1. Have a continuing power of attorney – This is critical because it allows an individual to choose who they want to manage their financial affairs in case they are no longer able to – this includes paying your bills, applying for benefits, collecting your pension and other income, monitoring your investments and making sure your assets are protected. Without this, your power of attorney will be up to the courts to choose someone – and it might not be your first choice (or a person you trust).

2. Start early – Don’t wait to put a plan in place for dealing with your finances when you’re unable to. The sooner you start the better. And if you’re worried about someone else, encourage him or her to take the same steps.

3. Share information – Where do you keep your banking and estate planning documents? Make sure you share this with someone you trust, ideally the person you’ve designated to have continuing power of attorney over your finances.

4. Consider automatic bill payments – If it becomes hard to keep track of monthly bills, think about automating the whole process so that you never miss a beat.

5. Make a list of where your money comes from – Whether it’s a pension or investment income, document your sources of income – what you get and when. This will help if someone has to step in and manage your finances if you’re not able to. You should also keep a record of all insurance policies you have to make sure that whoever is taking care of your money knows you’re covered and for how much.

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One Response to Dealing with dementia: 5 ways to plan ahead financially

  1. Susan Hunt says:

    All great suggestions. One additional consideration is the concept of moving seniors – at the first signs of dementia or even pre-emptive – into an independent living seniors facility.
    Living on their own, seniors often are isolated and sedentary which can contribute to the onset and decline into dementia. The social interaction, physical activity, regular nutritious meals and available medical supervision can be extremely beneficial to someone in this condition. We experienced this first hand with my mother in law whose condition actually improved once she moved into one of these facilities.

    Financially, the question is can the individual(s) afford this type of facility as most are independently run and are perceived expensive. The issue seniors and their offspring need to discuss is the need (or lack of) to leave an inheritance. Many of our parents’ generation believe that they need to leave something behind for their children and grandchildren and therefore resist spending money to go into these type of facilities. If you can dispel this concept, the sale of a primary residence combined with OAS and CPP can help cover the cost of an independent living facility.

    The initial financial discussions around this option were difficult at first but, for us, the benefit has really been seeing my mother-in-law active and happy and making new friends. She still exhibits the signs of dementia but she is safe and is getting the social interaction that is so critical to keep this disease at bay for as long as possible.