When Memory Fades: Planning for Care

cognitive decline



With the incidence of Alzheimer’s and other forms of cognitive decline projected to rise, this insight from Merrill Lynch Wealth Management could help you prepare financially for a day you hope never will come.

More and more families today find themselves touched by the tragedy of Alzheimer’s. Forty-four million people globally were living with the disease in 2014, and by 2050, that number is projected to multiply to 135 million, according to Alzheimer’s Disease International. There is also increasing public awareness of the emotional and financial toll that Alzheimer’s and other forms of dementia can take.

Consider, for example, the story of the Bazaz family. The first signs were subtle. Cecile Bazaz forgot her computer password. Then she asked her family twice, five minutes apart, what they wanted for breakfast. Before long, the successful Atlanta executive began missing deadlines, skipping appointments and going to work on her days off. Medical tests at Emory University in 2009 confirmed that Cecile, then just 51 years old, had early-onset Alzheimer’s disease.

That diagnosis set in motion a series of life-altering transitions for Cecile and her husband, Alister Bazaz, an executive at Bank of America. And until science comes up with a cure for dementia, more and more families will find themselves facing similar obstacles. Yet as Alister has discovered, there is much you can do to anticipate and prepare for a day you hope will never come. “I cannot think of anything more important for your financial life than planning for the possibility of Alzheimer’s or dementia,” he says.

How Would You Pay for Care?

A big part of that planning involves what to do if someone needs full-time nursing care at home or in a residential facility. Purchasing long-term-care insurance far in advance of when it may be needed is one way to help cover that large expense. Having adequate life insurance, too, could be crucial. Fortunately, when Alister and Cecile were in their early forties and in good health, they beefed up their long-term disability coverage, which pays benefits if you are no longer able to work.

Starting early can be advantageous when considering how to handle the health-related costs of later years. In your forties, long-term-care insurance is likely to be more affordable.

After Cecile’s diagnosis, but while she still was able to discuss her future, she and Alister met with a tax attorney and a lawyer specializing in estate matters. They settled issues such as assigning Cecile’s power of attorney to Alister, signing a living will and a health-care directive, and noting her preferences for care. They also considered estate issues—for example, what would happen if Alister died first? How could they ensure that Cecile would be cared for, and that their grown daughter, Kathleen, would receive the inheritance they wished to leave her?

“Another essential part of preparing for a family member’s cognitive decline is to make sure you have access to financial accounts and documents,” says Cynthia Hutchins, director of Financial Gerontology at Bank of America Merrill Lynch, who suggests recording critical information such as passwords and storing important papers in a secure location that family members can get to if necessary.

Financial Early-Warning Signs

The early indications of cognitive decline are often hard to identify. What starts as neglecting to pay bills can accelerate to impulsive spending, large account withdrawals or calling a financial advisor multiple times a day.

One way for family members to get an early warning about potential cognitive issues, Hutchins says, is to create a document authorizing a financial advisor to reach out to a family member or another trusted person if there are signs of problems.

Having the Difficult Conversation

The starting point of any strategy for dealing with cognitive decline is a frank, open discussion, says Hutchins. “This is a hard conversation to have, but it can empower everyone by identifying the needs, preferences and goals of a family member.” Those may include where that person wants to receive care and who will manage finances.

If it falls to you to prompt the conversation, Hutchins suggests asking whether your parent has thought about what will happen if he or she can no longer care for himself or herself. “Make sure they understand you are not trying to take away their independence,” she advises.

Caregiving Made (a Little) Easier

Families also need to consider who will take the role of primary caregiver and the financial implications of that choice. You may decide to leave your job to provide care, and as the disease progresses, to hire part-time aides to help with personal care and companionship, or you might consider adult daycare or respite care at a residential facility.

Finding an Alzheimer’s support group in your area can also help. “You need to take care of yourself as well,” says Alister Bazaz. “Make sure you eat well and exercise, and try to maintain a social network outside of your caregiving.”

For several years, Alister shared the care of Cecile with Kathleen, who is now in her mid-twenties, and they also had the help of professional caregivers. But as her condition worsened, Cecile needed assistance with even the most routine tasks, including eating. Alister and Kathleen finally realized they could no longer give Cecile everything she needed, and they made the difficult decision to move her into a residential-care facility.

“That’s a very personal decision for any family,” Alister says. But in cases of serious cognitive decline, caring for a spouse or parent at home often becomes overwhelming, and you will need to find a residential facility specializing in dementia care.

While there is no bringing back the smart, engaged person Cecile had been, “my daughter and I have become closer in the process of dealing with our family’s challenge,” Alister says. 

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