Every 65 seconds someone in the U.S. develops Alzheimer’s disease, according to the Alzheimer’s Association. That someone could be your parent.
My mom was diagnosed with Alzheimer’s disease at the age of 65. She had been showing signs of memory loss for more than a year, so it wasn’t difficult for me to accept the diagnosis. What was hard, though, was knowing what to do next.
The one thing I did know was that I was going to have to be the one to take care of her. She was living on her own because she and my dad had divorced, and my only sibling lived several states away. Fortunately, as a personal finance journalist, I had a good idea of what financial steps needed to be taken. Beyond that, there’s been a lot of trial and error on my part during the 11 years since my mom’s diagnosis.
Here’s what I’ve learned and what you should know if your parent is diagnosed with Alzheimer’s disease.
Accept the diagnosis and understand what it means
Even if you’ve seen signs of memory loss in your parent as I did with my mom, the actual diagnosis of Alzheimer’s disease can hit you like a ton of bricks. It’s OK to be upset. It’s OK to grieve.
But, remember that your parent needs you for support—especially if there is no spouse or partner. It’s important for you to accept the diagnosis so you can help your parent come to terms with the diagnosis. According to the Alzheimer’s Association, those with Alzheimer’s say that having people who reassure them that they will be there for them can help with the process of accepting a diagnosis. So let your parent know that you’re in this together.
It’s important for you to accept the diagnosis so you can help your parent come to terms with the diagnosis.
It’s also important for you to understand what stage of the disease your parent is in—early, middle or late stage. Your parent likely is in the early stage of the disease if he or she is having memory lapses but still can function independently. On average, people live four to eight years after an Alzheimer’s diagnosis but can live much longer, according to the Alzheimer’s Association.
You could have many years with your parent before the disease truly takes a toll. But the sooner you start creating a plan to deal with your parent’s memory loss, the better.
Make sure your parent has essential legal documents
As my mom was showing signs of memory loss, the first thing I did was suggest that she meet with an attorney to update her estate planning documents. I knew this needed to happen quickly because you must be mentally competent to sign documents such as a will, power of attorney and living will.
- A will or living trust spells out who gets your assets when you die. A living trust also can be used to transfer assets while you are living, which can be a useful tool in long-term care planning.
- A power of attorney document allows you to name an agent or agents to make financial decisions and transactions for you if you cannot. If your parent names his or her spouse as POA, it’s important to name an alternate POA—such as you, the child – in case something happens to the spouse.
- A living will or advance health care directive allows you to spell out what sort of end-of-life medical care (such as life support) you would or would not want and to name someone to make health care decisions for you if you can’t.
It’s especially important for your parent to have the latter two documents in place before the middle and late stages of Alzheimer’s. At that point, someone will need to be making financial and health care decisions for your parent. If a power of attorney and health care proxy haven’t been named and your parent is no longer competent, you or your parent’s caregiver will need to go through what can be a lengthy and expensive court process to be named conservator or guardian.
If your parent is still in the early stage of Alzheimer’s, he or she might be able to sign estate planning documents. “Don’t think if parents are having trouble remembering that it’s too late,” says elder law attorney Cathy Sikorski. A diagnosis of Alzheimer’s does not mean your parent is no longer competent, she says. An attorney will ask questions to determine whether your parent understands what he or she is signing.
Once you need to access your parent’s accounts or have to make decisions for them, you will need the actual power of attorney document to show to your parent’s financial institutions. Don’t let them hang onto the original document, though. Provide a copy.
Gather information about your parent’s finances
If your parent names you power of attorney and you will have to handle money matters as your parent’s memory declines, you need to gather as much information about your parent’s finances as soon as possible. Otherwise, you’ll have to play detective as your parent forgets more and becomes confused.
Let your parent know that it’s important for you to have the following information so you’ll be able to help:
- Sources of income and whether your parent receives that income by check or direct deposit
- A list of monthly bills and how they are paid
- A list of financial accounts, account numbers, usernames and passwords
- Types of insurance policies, names of companies that issued the policies, how premiums are paid
- Types and amounts of household debt
- Personal information such as Social Security, Medicare and driver’s license numbers
- Location of tax records
- Names and contact information of financial and legal professionals your parent works with
- Final wishes for funeral and burial
If your parent is reluctant to give you this information in the early stage of Alzheimer’s, ask your parent to write it down for you, store it someplace safe, tell you how to access it and agree on a point when you would be allowed to access it.
Also keep in mind that you can’t come in and take over your parent’s finances entirely in the early stage of the disease. “You need to start slow,” says Linda Fodrini-Johnson, who has been a geriatric care manager for 34 years. Offer to help with a few tasks, such as setting up automatic bill payment or sorting through mail to weed out the junk mail. “Once trust is established, you can gradually step in and do more,” Fodrini-Johnson says.
You can ease your way in by being a second set of eyes on your parent's finances. A convenient way to monitor financial accounts, credit reports and identity is to use an all-in-one service such as Carefull. If you have your parent's login credentials, you can link bank, credit card investment accounts to get 24/7 monitoring and alerts when Carefull spots money mistakes, unusual transactions and signs of fraud.
Try Carefull for free for 30 days to monitor your parents’ finances and help protect them from fraud and money mistakes.
[ Read: Checklist for Managing Your Elderly Parents’ Finances ]
Discuss long-term care options
Your parent might be perfectly capable of caring for him or herself now—especially if there is support from a spouse or partner. But there will come a point when your parent will no longer be able to drive, to prepare meals, to remember to take medications, to dress or bathe independently.
Counting on a spouse to provide care isn’t a fool-proof plan. The spouse might not be physically or mentally capable at that point to provide the level of care that is needed. The spouse might no longer be living. That’s why it’s important to discuss long-term care options with your parent in the early stage of Alzheimer’s disease. Fodrini-Johnson says you can say to your parent, “’I want it to be your decision, not mine. Let’s look at your choices and manage those choices.’” This allows your parent to have some control.
Those choices include the following:
- Care at home: If your parent wants to receive care at home, which most people do, discuss whether the home is set up to accommodate your parent’s needs. Your parent or parents might need to move to, say, a one-story home or apartment with a walk-in shower to reduce the risk of falls. And if your parent is counting on a family member to provide care, there needs to be a back-up plan. The median monthly cost of a home health aide is $4,385, according to insurance company Genworth’s Cost of Care Survey. You can find in-home care services at Caring.com or by contacting your local Area Agency on Aging.
- Care at an assisted living facility: Your parent can get round-the-clock assistance with the daily activities of living – such as dressing, bath and meal preparation – at an assisted living facility. Rooms can be private or semi-private, and the median monthly cost is $4,051, according to Genworth. You can find facilities through Caring.com and APlaceforMom.com.
- Care at a memory care facility: This type of facility can be better suited for the needs of someone with Alzheimer’s because it will be locked to the outside to prevent wandering, and the care will be specialized for the needs of those with memory loss. The cost can be on par with or higher than that of an assisted living facility. You can find one through Caring.com and APlaceforMom.com.
- Care at a skilled nursing home: These licensed health care facilities provide 24-hour medical care, which your parent might need in the late stage of Alzheimer’s disease. The median monthly cost of a private room is $8,517, according to Genworth. Medicare.gov has a guide to choosing a nursing home and detailed information about Medicare- and Medicaid-certified facilities.
[ Read: What You Need to Know About Long-Term Care ]
Make a plan for paying for long-term care
Despite popular belief, Medicare does not pay for long-term care. Medicaid typically does not pay for care in an assisted living facility but will pay for care in skilled nursing facilities and at home—if your parent has limited income and assets. It is possible to spend down assets or transfer them to qualify for Medicaid. But your parent should work with an elder law attorney to develop a strategy.
If your parent has long-term care insurance, review the policy to see how much coverage your parent has. You’ll be able to use this insurance to help pay for care at home or in a facility for a certain number of years or perhaps for a lifetime up to a certain maximum dollar amount. If your parent doesn’t already have long-term care insurance, she won’t be able to get coverage with an Alzheimer’s diagnosis.
One other option is a life settlement. If your parent has a whole life insurance policy with cash value, he might be able sell it to a life settlement company and get a lump sum of cash that could be used to pay for care. The amount received will be higher than the cash surrender value of the policy but less than the death benefit.
If your parent is counting on you to provide care, discuss whether your parent will be able to pay you if you have to stop working. If your parent can pay, get something in writing to avoid any suspicion from siblings or other family members that you’re simply taking your parent’s money. If your parent is eligible for Medicaid, you might be able to get paid through this government program for providing care, Sikorski says.
Hiring a professional or a team of professionals can help you create a plan for your parent’s care and a strategy to pay for it. You can find an elder law attorney through the National Academy of Elder Law Attorneys to draft estate planning documents and plan for long-term care needs.
A fee-only financial planner could help review your parent’s assets to create a plan to pay for care. You can find one through the National Association Personal Financial Advisors. And a certified public accountant or enrolled agent can assist with tax preparation.
A geriatric care manager—also called an eldercare manager or aging life care expert – can help oversee your parent’s care, assist with insurance claims, connect you with community resources and entitlement programs and provide crisis management. You can find one through the Aging Life Care Association.
Most importantly, find emotional support for yourself and your parent. Look for Alzheimer’s support groups in your community or connect with your local Alzheimer’s Association chapter. You and your parent don’t have to feel like you’re going through this on your own. Get help and advice from others.
[ Keep Reading: What You Need to Know About Being a Financial Caregiver ]