Protecting financial interests through legal means for loved ones with Alzheimer’s

**Protecting Financial Interests for Loved Ones with Alzheimer’s**

Alzheimer’s disease is a progressive condition that affects not only the person with the disease but also their loved ones. One of the most significant challenges families face is managing the financial aspects of the disease. As Alzheimer’s progresses, individuals may experience changes in their financial behaviors, leading to difficulties in managing their finances. Here are some steps you can take to protect your loved one’s financial interests through legal means.

### Understanding the Financial Impact of Alzheimer’s

Alzheimer’s can start 20 years or more before noticeable symptoms appear. Even before a diagnosis, people with Alzheimer’s may begin to experience financial difficulties. They might fall behind on mortgage payments, credit card bills, and other financial obligations. This can lead to late fees, higher interest rates, and even foreclosure on a home[1].

### Identifying Financial Documents

It’s crucial to know where your loved one’s financial documents are located and ensure they are in a safe place. These documents include:

– **Tax returns** for the past seven years, including W-2 forms, income statements, and canceled checks for deductible expenses.
– **Bank statements**
– **Insurance policies**, such as car, health, life, rental, and homeowner’s insurance.
– **Retirement plan and/or pension plan statements**
– **Mutual fund and other investment statements**
– **An inventory of assets owned** and a record of major purchases.
– **An inventory of debts and regular obligations**, with a list of the institutions to which they are owed.
– **Deed to home or other properties**
– **Titles to vehicles**
– **Important papers** such as birth, marriage, death, and divorce certificates.
– **Legal documents** such as power of attorney, Living Will, and Will.
– **Any stock or bond certificates**
– **Account numbers, passwords, and locations of safety deposit boxes**
– **A list of important contacts**, such as doctors, lawyers, and financial professionals[3].

### Setting Up Power of Attorney

One of the most important legal documents you can set up is a Power of Attorney (POA). This document authorizes another person to make medical and/or financial decisions on your loved one’s behalf. It can be as simple or as detailed as you like, but it must be signed by an individual who is deemed legally competent at the time. You can choose to make it durable, meaning it applies even after the individual becomes unable to make decisions, or springing, meaning it takes effect once the individual loses their decision-making ability[5].

### Creating an Advance Directive

An Advance Directive or Living Will is another legal document that states an individual’s wishes for medical treatment and services. This document can be combined with a POA in some states, but the rules governing them vary by state. It’s essential to discuss these options with an attorney as soon as possible after diagnosis so that the individual with Alzheimer’s can participate in the process[5].

### Managing Finances Together

Starting the conversation about financial management early is crucial. Approach these discussions with respect and empathy, focusing on collaboration rather than criticism. Here are some conversation starters that could help:

– “I want to make sure your finances stay secure and well-managed.”
– “Could we work together to set up some systems that make bill-paying easier?”
– “Let’s talk about ways to protect your financial independence.”

Practical steps include setting up automatic bill payments for regular expenses, creating a simple monthly budget together, and working with a financial advisor who has experience with Alzheimer’s planning[1].

### Practical Steps for Financial Management

1. **Set Up Automatic Bill Payments**: This can help ensure that bills are paid on time without the need for constant reminders.
2. **Create a Simple Monthly Budget**: Work together to set up a budget that accounts for all regular expenses.
3. **Work with a Financial Advisor**: A financial advisor experienced in Alzheimer’s planning can help