Fortunately, if a parent has given their loved one a power of attorney, it lets them make financial decisions when that parent cannot manage these duties for themselves. This document might even enable a loved one to establish a trust with the parent’s assets. Based on my post yesterday, that could save the estate thousands of dollars and an equal amount of time spent to voluntarily subject the estate to probate.
In many cases, managing finances for a loved one with dementia can be very difficult. Nobody relishes the thought of gathering around the dinner table, talking about the risks of aging. However, statistics on this subject cannot be ignored: 70% of everyone age 65 or older will require a period of long-term care; the chances are too high to simply ignore this problem.
Here’s another shocking statistic: the "Aging, Demographics, and Memory Study" by the National Institute on Aging found that 14% of Americans age 71 and older have some form of dementia. The Chicago Health and Aging Project estimates that nearly one-third of people 85 and older have Alzheimer’s Disease. The real issue, however, is that too few families will discuss the topic of managing money and deteriorating faculties the come with age. Only 25% of families surveyed discussed how their parents will be financially provided for or cared for, as they get older, according to a 2014 study by Merrill Lynch.
Then there is this statistic: when looking at people 50 and older, the survey noted that about 50% of those surveyed didn’t have a will, and only 40% had a health care directive.
A large component of estate planning is arranging your finances, so if cognitive decline develops, your caregiver can manage your money and help you maintain your quality of life.
Reference: Forbes (October 31, 2017) “Managing Finances For A Loved One With Dementia”