Financial Tips for Caring for Parents with Alzheimer’s

by Melissa Barkley

Obvious Considerations

• Wills and trusts: About 1 out of 9 people over the age of 65 have Alzheimer’s disease, so making sure estate planning documents are always up to date is a good idea.  Even if you have only recently suspected that your loved one might have early-stage Alzheimer’s, it might already be too late to update estate planning documents.  As Alzheimer’s progresses, changing these documents is nearly impossible.  When was the last time wills and trusts were reviewed?
• Powers of Attorney, Healthcare Powers of Attorney, and Healthcare Directives: These are especially important to keep updated.  The more recent the update, the better.  For married clients where one spouse is still in good mental and physical condition, the POA and HPOA is obvious—the other spouse.  In cases where the spouse is widowed or both spouses have Alzheimer’s or other health concerns, it’s important to consider which child or close family or friend should be in charge.  We had clients where the mother was diagnosed with an aggressive form of cancer, and the father was diagnosed with Alzheimer’s, so the two children (who lived close by) decided to share the responsibilities.  The brother became the Power of Attorney, and the sister assumed the role of caregiver and Healthcare Power of Attorney.  Both consulted each other on decisions, but there needed to be a point person to make a final decision.  This division of responsibilities worked well for this family without one child feeling overly burdened with all the responsibilities or left out of decisions completely.
• Titling and Beneficiary Changes: If accounts need to be re-titled or beneficiaries need to be changed, it’s better to do this while the client is still of sound mind.  You can consider adding a child to a checking account to help manage expenses but be aware that titles trump anything in the will, so use this tactic with caution and always consult an estate planning or tax professional.

Not-so Obvious Considerations

• Powers of Attorney Specific to Custodians: Many people think that the Power of Attorney is sufficient, but that might not always be the case.  Custodians increasingly prefer to have their own Power of Attorney document specific to that custodian on file.  Having these already in place makes the management of assets with the respective custodian much more seamless.  Updating these as soon as the parent is diagnosed is always a good idea.
• Trusted Contact with a Custodian:  This is just a “check-in” person on an account.  If the custodian cannot reach the client, a representative can contact the Trusted Contact on file and make sure that everything is ok.  Trusted Contact does not have access to financial information, and it’s often a neighbor or close friend that sees the client on a regular basis.  This allows the custodian to check-in and make sure everything is alright with a client without divulging private information.
• Consolidating assets: Managing several buckets of assets can be cumbersome enough for clients, even more so for Powers of Attorney, so now might be a good time to consolidate assets under one custodian.  It’s much easier to manage Required Minimum Distributions (RMDs) from retirement accounts and do tax planning if the funds are in as few accounts as possible.

“I bet you never thought of these” Considerations

• Go paperless: When our client had two parents diagnosed with Alzheimer’s within the same year, he decided to limit incoming mail to their house as much as possible.  He completely stopped all incoming bank, retirement, and insurance statements from coming to the house.  His goal was two-fold – limit the confusion of his parents seeing the statements and minimize the chances of caregivers, housekeepers, etc. from seeing his parents’ financial information.  He already had Power of Attorney for his parents, so he was able to manage everything online.
• Cell phone protections: You can set cell phones up to only receive calls from certain trusted numbers.  This allows protection from the aging parent receiving a call requesting money or sensitive information.
• Email protection: You can set up the aging parent’s email to only receive emails from certain email addresses, and you can monitor the emails to make sure only known contacts have access.
• Phone passcodes: Consider having the phone passcode for your Alzheimer’s parents.  This will allow the family to have access to information and even treasured pictures that might otherwise be lost if the passcode is forgotten.
• Credit card protections: Consider locking the credit of the family member with Alzheimer’s.  Credit-locking is a great tool for anyone to prevent identity theft and is especially important in the case of Alzheimer’s. Along the same lines, consider getting credit card charge alerts to manage what the parent is spending money on.  The goal is to continue to give them freedom while keeping safeguards in place.
• Low balance checking account: One client wanted to allow his mother with Alzheimer’s to continue writing her weekly check to her housekeeper (something that was very important to her), so he only put a small amount of money in that checking account.  This gave her the freedom to write her check without fear that someone might get a hold of the checking account information and compromise the account.
• Location tracking: For parents with early-Alzheimer’s that still drive, consider using location services that allow you to track their car and their cellphones.  This allows them freedom to continue living as independently as possible.  Imagine having a new teenage driver, what would you do to keep them safe?
• Medication dispensing: This is a relatively new option, but there are medication dispensers that dispense the exact medication at the correct time of day.  This was a game-changer for our client, whose dad kept forgetting to take his medication.  Once they started using this system, his health improved dramatically, and he was able to reduce the medication he was taking.

When our client took his mother to the doctor to receive an Alzheimer’s diagnosis, after just receiving the same news about his father, his mother broke down in tears.  She said, “What are you going to do now that both of us have this?  I never wanted to be a burden for you!”  The above tips helped lessen the blow of a devasting Alzheimer’s diagnoses by maintaining a good balance of safety and independence for his aging parents and simplicity and financial confidence for our client.