Selling the Family Home when a Loved One needs Nursing Care

November 28, 2023

When an aging relative decides the time is right to move into an assisted living or continuing care facility, families face many decisions. This is often a difficult but necessary step for older individuals with trouble living independently or planning for their future needs. Selling the family home when a loved one needs nursing care can be a challenge. A recent article from Herald—Standard, “How to handle selling a home when moving into an assisted living facility,” offers suggestions to help families navigate the process.

First, speak with an estate planning attorney to have a trusted, responsible family member be named Power of Attorney. Individuals moving into assisted living may not have any cognitive problems at the time of the move. However, selling a home for a family member who develops dementia can present complex challenges. Only a person with legal capacity may transfer their home to a new owner. Having a Power of Attorney allows a family member to step in and manage the transaction without needing to go to court and have a guardian named.

Talk about the situation and the sale with the aging family member. They will need time to process the idea of selling their home and moving. Homeowners make untold sacrifices and compromises to buy and maintain their homes, so the decision to sell a beloved home is almost always very difficult and brings out a range of emotions.

Throughout this process, an open and honest dialogue about what can be achieved by selling the home and improving their quality of life will be helpful.

Sorting through belongings is an extremely hard task. A lifetime of memories and a loss of their independence are all wrapped up in the contents of a home. It will be impossible to take the entire contents into a one or two-bedroom apartment. Take the time to sort through belongings with your family members and select certain items to give them a sense of home in a smaller space.

If possible, try to pass on some items to younger family members. Most importantly, handle this process with as much compassion as possible.

Keep all relevant people involved and current throughout the process. This is particularly important if the family members are scattered in different states. Adult children who live far away and can’t be active participants in this process shouldn’t be dismissed and left out. Open communication with other family members will minimize the chances of objections when the sale and move take place.

Finally, because this is perhaps the largest and last financial transaction, make sure the sale of their home is done with an eye to their estate plan. Selling the family home when a loved one needs nursing care may cause tax issues. There may be ways to minimize tax exposure for the individual and their estate plan. Confer with an estate planning attorney to avoid any missteps. If you would like to learn more about managing property in your estate plan, please visit our previous posts.

Reference: Herald-Standard (Oct. 27, 2023) “How to handle selling a home when moving into an assisted living facility”

Photo by Pavel Danilyuk

The Difference Between Guardianship and Power of Attorney

November 27, 2023

Navigating the intricate landscape of elder law can be daunting, especially when faced with the decision between guardianship and power of attorney for elderly parents. This article sheds light on the difference between guardianship and power of attorney, providing clarity on which approach might be the best fit for your family’s unique situation.

What Exactly Is a Power of Attorney?

A power of attorney is a legal document that empowers an individual, often referred to as the “agent” or “attorney-in-fact,” to act on behalf of another, known as the “principal”. This authority can span a myriad of areas, from handling financial matters to making pivotal medical decisions.

Deciphering the Power of Attorney Document: The power of attorney document delineates the extent of the agent’s authority. For instance, a medical power of attorney focuses on health care decisions, while a financial power of attorney pertains to managing financial assets, like bank accounts.
The Significance of Durable Power of Attorney: This variant of power of attorney remains valid even if the principal becomes incapacitated due to conditions like dementia or Alzheimer’s disease. It’s imperative that this durable power of attorney must be prepared with precision, ensuring the agent’s ability to act remains unaffected by the principal’s mental state.

Guardianship: An Overview

Guardianship establishes a legal relationship where a guardian is court-appointed to make decisions for someone unable to do so themselves.

Guardianship Proceedings: Initiating guardianship requires one to file a petition in the probate court. If the court ascertains that the individual is no longer able to care for themselves or their assets, it may appoint a guardian.
Differentiating Guardian of a Person from Guardian of an Estate: While the former is tasked with personal and medical decisions, the latter oversees financial matters. The guardian’s responsibilities, whether it’s a duty to provide care or manage financial assets, hinge on the terms of the guardianship.

Power of Attorney or Guardianship: Which Path to Choose?

The choice between power of attorney and guardianship is contingent on the specific needs of the elderly individual.

Comparing Decision-Making Power: Both the agent (under power of attorney) and the guardian have a shared duty to provide for the best interest of the individual. However, a guardian typically possesses a more expansive level of decision-making power.
Flexibility and Autonomy: With a power of attorney, the principal gets to choose the person who will act on their behalf. In contrast, in a guardianship proceeding, the court has the final say, which might not always resonate with the individual’s preferences.

When Is Guardianship the Answer?

Guardianship becomes indispensable when an elderly parent is incapacitated and lacks a power of attorney.

The Process of Seeking Guardianship: If there’s a belief that an elderly parent is vulnerable, it becomes imperative to file a petition for guardianship. Consulting an elder law attorney can streamline the guardianship proceeding.
Guardianship vs Power of Attorney Post-Incapacitation: In the absence of a durable power of attorney, guardianship emerges as the sole recourse if an individual becomes incapacitated.

Can Power of Attorney and Guardianship Coexist?

Indeed, it’s possible to have both mechanisms in place, although their interplay can be intricate.

Roles and Boundaries: An adult child might be designated as the agent for financial matters under a power of attorney, while a professional guardian could be entrusted with medical decisions.
Harmonious Operation: Both the agent and guardian must act in the best interest of the individual, ensuring their comprehensive well-being.

Making the Right Choice for Your Family

Deciding between power of attorney and guardianship demands careful contemplation.

Engage with an Elder Law Attorney: Their expertise can offer tailored guidance, helping you traverse the complexities of elder law.
Factor in the Elderly Parent’s Desires: Their voice is paramount in the decision-making matrix, ensuring that their autonomy and dignity are preserved.

Key Takeaways:

Power of Attorney is a legal instrument allowing individuals to designate someone to act on their behalf.
Guardianship is a court-sanctioned role for those incapacitated and unable to make decisions autonomously.
The distinction between the two hinges on the individual’s circumstances and the extent of decision-making power required.
Both mechanisms can coexist, though their roles might differ.
Engaging with an elder law attorney is pivotal to making an informed decision tailored to your family’s needs.

Work closely with your estate planning attorney to ensure you understand the difference between power of attorney and guardianship. If you would like to learn more about guardianship, please visit our previous posts.

Photo by Andrea Piacquadio

Consider using a Trust Be for Long-Term Care

November 20, 2023

More than a few seniors who are retired or nearing retirement lose sleep worrying over being able to afford the expense of long-term care, including nursing home care, which can cost thousands monthly. The fallback option for many Americans is Medicaid; according to a recent article, “Long-Term-Care planning using trusts,” from the Journal of Accountancy., Medicaid is a joint federal-state program requiring spending down assets. One option is to consider using a trust for long-term care.

To be eligible for long-term care through Medicaid, a person’s “countable” assets must fall below an extremely low ceiling—in some states, no more than $2,000, with some provisions in some states protecting the “well” spouse. States vary in terms of which assets are counted, with many exempting a primary residence, for example.

For many people, planning for Medicaid for long-term care may consider the use of an irrevocable trust. The basic idea is this: by transferring assets to an irrevocable trust at least five years before applying for Medicaid for long-term care, the Medicaid agency will not count those assets in determining whether Medicaid’s asset ceiling is satisfied.

If the planning is done wrong, there is a risk of not qualifying, thereby defeating the objective of creating the irrevocable trust. In addition, any tax planning may be undone, causing liquidity and other problems.

Some people plan to qualify for Medicaid even though they have asset levels as high as $2 million or more. Much of this may be the family’s primary residence, especially in locations like New York City, with its elevated real estate market. Costs at nursing homes are equally high, with nursing homes costing private-pay patients upwards of $20,000 a month, or $250,000 per year.

Timing is a key part of planning for Medicaid. Many estate planning attorneys recommend clients consider planning in their mid-to-late 60s or early 70s to move assets into a Medicaid Asset Preservation Trust, also called a Medicaid Asset Protection Trust.

This is because of Medicaid’s five-year lookback period. Most states have a five-year look-back period for both nursing home and home health care. If any transfer of countable assets has been made within the preceding five years of applying for long-term-care Medicaid, there will be a penalty period when the person or their family must pay for the care. The penalty is typically measured by the length of time the transferred assets could have paid for care, based on the average costs of the state or the region.

While there is no way to know when a person will need long-term care, statistically speaking, a person in their mid-to-late 60s or early 70s can expect to be healthy enough to satisfy the five-year lookback.

Why not simply make gifts to children during this time to become eligible for Medicaid? For one reason, there’s no way to prevent a child from spending money given to them for safekeeping. A trust will protect assets from a child’s creditors, and if the child should undergo a divorce, the assets won’t end up in the ex-spouse’s bank accounts.

Using a trust for Medicaid planning could be combined with gifts made to children or assets placed in trust for children, depending on the individual’s financial and familial circumstances.

The creation of a Medicaid Asset Preservation Trust is critical. The estate planning attorney must seek to accomplish two things: one, to say to Medicaid that the settlor, or creator of the trust, no longer owns the assets. At the same time, the IRS must see that the settlor still owns these assets and, therefore, receives a basis step-up at death.

If you are considering a trust for long-term care, an experienced estate planning attorney will be needed to advise you and create a Medicaid Asset Preservation Trust to meet the Medicaid and IRS requirements. If you would like to learn more about long-term care planning, please visit our previous posts.

Reference: Journal of Accountancy (Oc. 9, 2023) “Long-Term-Care planning using trusts”

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You Need Two Kinds of Power of Attorney Documents

November 7, 2023

Wills and trusts are used to establish directions about what should happen to your property upon death and who you want to carry out those directions, explains an article from Coeur d’Alene/Post Falls Press, “Power of attorney documents come in two main varieties—do you have both?” However, the estate planning documents addressing what you want while you are still living but have become incapacitated are just as important. To some people, they are more important than wills and trusts. You need two kinds of Power of Attorney documents to have all of your bases covered.

A comprehensive estate plan should address both life and death, including incapacity. This is done through Power of Attorney documents. One is for health care, and the other is for financial and legal purposes.

A Power of Attorney document is used to name a decision maker, often called your “Agent” or “Attorney in Fact,” if you cannot make your own decisions while living. You can use the POA document to state the scope and limits the agent will have in making decisions for you. A custom-made POA allows you to get as specific as you wish—for instance, authorizing your agent to pay bills and maintain your home but not to sell it.

The financial POA document gives the chosen agent the legal authority to make financial decisions on your behalf. In contrast, a Health Care Power of Attorney document gives your agent the legal authority to make healthcare decisions on your behalf.

By having both types of POA in place, a person you choose can make decisions on your behalf.

Suppose you become incapacitated and don’t have either Power of Attorney documents. In that case, someone (typically a spouse, adult child, or another family member) will need to apply through the court system to become a court-appointed “guardian” and “conservator” to obtain the authority the Power of Attorney documents would have given to them.

This can become a time-consuming, expensive and stressful process. The court might decide the person applying for these roles is not a good candidate, and instead of a family member, name a complete stranger to either of these roles.

The guardianship/conservator court process is far less private than simply having an experienced estate planning attorney prepare these documents. While the records of the legal proceedings and the actual courtroom hearings are often sealed in a guardianship/conservatorship court process, there is still a lot of personal information about your life, health and finances shared with multiple attorneys, the judge, a social worker and any other “interested parties” the court decides should be involved with the process.

For peace of mind, have an experienced estate planning attorney explain why you need two kinds of power of attorney documents. Preparing these documents when creating or updating your estate plan is a far better way to plan for incapacity. If you would like to learn more about powers of attorney, please visit our previous posts.

Reference: Coeur d’Alene/Post Falls Press (Oct. 11, 2023) “Power of attorney documents come in two main varieties—do you have both?”

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Estate Planning can help address Nursing Homes Costs

October 26, 2023

Estate planning can help address nursing home costs. Figures from a Bureau of Labor Statistics (BLS) report published recently showed that the growth in the price of nursing homes and adult care has been especially volatile this year, reports Kiplinger’s recent article entitled, “Nursing Home Costs Soared in July.”

The national average cost of nursing homes rarely declines. The cost declined for just five months in the last quarter century (the months between 1997 and 2022). Therefore, it’s surprising to see three months of decline in 2023 (April, May, and June). Nonetheless, the total 1.2% percent dip in those three months was more than offset by the 2.4% cost increase in July.

It’s hard to determine if the July price jump was an aberration or indicative of future price increases. This unusual volatility likely shows an industry struggling to regroup after the disruptions of the pandemic, which severely impacted nursing.

Nursing home and adult care is very expensive. Most people spend over $7,000 in out-of-pocket costs yearly.

This high cost is likely due to several factors, and the increased demand from a rapidly aging population, inflation and a shortage of qualified nurses top the list.

However, there is some good news: the U.S. Government plans to direct more funding to support the nursing workforce, though the effect of the program will take time to show up in the preparedness and availability of nurses.

For most active, middle-aged people, it’s hard to imagine that you might need significant nursing care one day. However, research shows that 70% of adults who survive to age 65 need at least some long-term support before they die, and 48% receive some paid care, according to a study by The Urban Institute.

The key is to pay attention to financial planning. A senior’s thoughtfulness will let her family move them to a high-quality nursing home and likely be covered financially for a long time.

Could your family say the same thing? Do you know the range of costs in your area?

For example, the typical annual cost of a nursing home ranges from $59,495 for a shared room in Louisiana to a yearly cost of $380,000 in parts of Alaska.

While Medicare may cover some expenses, partnering with a professional is wise to get your long-term care planning on the right track. Estate planning can help address nursing home costs. If you have children, you’ll be doing them an enormous favor. If you would like to learn more about elder care, please visit our previous posts.

Reference: Kiplinger (Aug. 16, 2023) “Nursing Home Costs Soared in July”

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Singles Need Estate Planning for Incapacity

May 15, 2023

Estate planning is even more critical for singles than married couples—and it has nothing to do with whom you’ll leave assets to when you die. A recent article from AARP, “6 Estate Planning Tips for Singles,” explains how estate planning addresses support during challenging life events. Singles need estate planning during their lifetime for issues such as incapacity.

Estate planning addresses medical and financial decisions for an incapacitated person. For singles, these may be more complex questions to answer.

Whether someone has never married or is divorced or widowed, these are challenging questions to answer. However, they must be documented. In addition, singles with minor children need to nominate a trusted person who can care for their children if they cannot. Estate planning addresses all of these issues.

To be sure you complete this process, start with a conversation with an experienced estate planning attorney. This will help with accountability, ensuring that you start and finish the process.

Here are some pointers for singles who keep putting this vital task off:

What would happen if you don’t leave clear instructions about who will make medical decisions in case of incapacity? A doctor who doesn’t know your wishes will decide for you. If you don’t want to be placed on a ventilator for artificial breathing or fed by a stomach tube while in a coma, the decision will be made regardless of your wishes.

Dying without a will is known as dying “intestate.” All of your assets will be distributed according to the intestate succession laws in your state. If no relatives come forward to claim your property, the state receives your assets. This is not what most people want.

Part of your estate plan includes naming a personal representative—an executor—who will oversee your affairs after your death. You’ll want to designate someone who is organized, has good judgment and can handle financial matters. You should also name a backup, so that if the first person cannot or does not wish to serve, there will be someone else to take control. Otherwise, the court will name someone who doesn’t even know you to take on this task. It’s better to designate someone than leave this to the state.

Your estate plan includes the following:

Last will and testament. This is where you nominate your executor, heirs and how your assets will be distributed. You can also appoint a guardian for minor children. Note that anyone named as a beneficiary on a retirement, insurance policy, or investment account supersedes any instructions in your will, so be sure to update those and check on them every few years to be sure they are still aligned with your wishes.

Living trust. This is a legal entity owning assets to be given to beneficiaries, managed by a trustee of your choosing, and avoids the delays and costs of probate.

Financial Power of Attorney (FPOA). This document authorizes someone you name to act as your agent and make financial decisions if you cannot. An FPOA can prevent delays in accessing bank and investment accounts and paying your bills. The FPOA ends upon your death.

Living will, durable medical power of attorney, or advance health care directive. These documents allow you to designate someone to communicate your health care wishes when you cannot. For example, you can include instructions on pain management, organ donation and your wishes for life support measures.

Health care power of attorney (HPOA). Like the living will, which is more associated with end-of-life care, the HPOA lets someone make medical treatment decisions on their behalf.

Singles need estate planning to protect themselves for incapacity. Be sure to communicate your wishes with family and friends. Tell your executor where your documents may be found and provide them with the information they’ll need so they may act on your behalf. If you would like to learn more about planning for incapacity or disability, please visit our previous posts.

Reference: AARP (April 7, 2023) “6 Estate Planning Tips for Singles”

Planning for Long-Term Care with Irrevocable Trusts

April 17, 2023

One of the best strategies to plan for long-term care involves using an irrevocable trust. However, the word “irrevocable” makes people a little wary. It shouldn’t. Planning for long-term care with irrevocable trusts can provide peace of mind for your family. The use of the Intentionally Defective Grantor Trust, a type of irrevocable trust, provides both protection and flexibility, explains the article “Despite the name, irrevocable trusts provide flexibility” from The News-Enterprise.

Trusts are created by an estate planning attorney for each individual and their circumstances. Therefore, the provisions in one kind of trust may not be appropriate for another person, even when the situation appears to be the same on the surface. The flexibility provisions explored here are commonly used in Intentionally Defective Grantor Trusts, referred to as IDGTs.

Can the grantor change beneficiaries in an IDGT? The grantor, the person setting up the trust, can reserve a testamentary power of appointment, a special right allowing grantors to change after-death beneficiaries.

This power can also hold the trust assets in the grantors’ taxable estate, allowing for the stepped-up tax basis on appreciated property.

Depending on how the trust is created, the grantor may only have the right to change beneficiaries for a portion or all of the property. If the grantor wants to change beneficiaries, they must make that change in their will.

Can money or property from the trust be removed if needed later? IDGT trusts should always include both lifetime beneficiaries and after-death beneficiaries. After death, beneficiaries receive a share of assets upon the grantor’s death when the estate is distributed. Lifetime beneficiaries have the right to receive property during the grantor’s lifetime.

While grantors may retain the right to receive income from the trust, lifetime beneficiaries can receive the principal. This is particularly important if the trust includes a liquid account that needs to be gifted to the beneficiary to assist a parent.

The most important aspect? The lifetime beneficiary may receive the property and not the grantor. The beneficiary can then use the gifted property to help a parent.

An often-asked question of estate planning attorneys concerns what would happen if tax laws changed in the future. It’s a reasonable question.

If an irrevocable trust needs a technical change, the trust must go before a court to determine if the change can be made. However, most estate planning attorneys include a trust protector clause within the trust to maintain privacy and expediency.

A trust protector is a third party who is neither related nor subordinate to the grantor, serves as a fiduciary, and can sign off on necessary changes. Trust protectors serve as “fixers” and are used to ensure that the trust can operate as the grantors intended. They are not frequently used, but they offer flexibility for legislative changes.

Planning for long-term care with irrevocable trusts is an excellent way to protect assets with both protection and flexibility in mind. If you would like to learn more about long-term care planning, please visit our previous posts.

Reference: The News-Enterprise (March 18, 2023) “Despite the name, irrevocable trusts provide flexibility”

Asset Protection Trusts can address Long Term Care

April 5, 2023

Asset protection trusts can address long term care costs. As the number of people aged 65 plus continues to increase, more seniors realize they must address the cost of long-term health care, which can quickly devour assets intended for retirement or inheritances. Those who can prepare in advance do well to consider asset protection trusts, says the article “Asset protection is major concern of aging population” from The News Enterprise.

Asset protection trusts are irrevocable trusts in which another person manages the trust property and the person who created the trust—the grantor—is not entitled to the principal within the trust. There are several different types of irrevocable trusts used to protect assets. Still, one of the more frequently used irrevocable trusts for the purpose of protecting the grantor’s assets is the Intentionally Defective Grantor Trust, called IDGT for short.

As a side note, Revocable Living Trusts are completely different from Irrevocable Trusts and do not provide asset protection to grantors. Grantors placing their property into Revocable Living Trusts maintain the full right to control the property and use it for their own benefit, meaning any assets in the trust are not protected during the grantor’s lifetime.

IDGTs are irrevocable, and grantors have no right to principal and may not serve as a trustee, further limiting the grantors’ access to the property in the trust. Grantors may, however, receive any income from trust-owned property, such as rental properties or investment accounts.

During the grantor’s lifetime, any trust income is taxed at the grantor’s tax bracket rather than at the much higher trust tax bracket. Upon the grantor’s death, beneficiaries receive appreciated property at a stepped-up tax basis, avoiding a hefty capital gains tax.

While the term “irrevocable” makes some people nervous, most IDGTs have built-in flexibility and protections for grantors. One provision commonly included is a Testamentary Power of Appointment, which allows the grantor to change beneficiary designations.

IDGTs also include clauses providing for the grantors’ exclusive right to reside in the primary residence. However, if the grantor needs to change residences, the trustee may buy and sell property within the trust as needed.

IDGTs provide for two different types of beneficiaries: lifetime and after-death beneficiaries. Lifetime beneficiaries are those who will receive shares of the total estate upon the death of the grantor. Lifetime beneficiary provisions are important because they allow the grantor to make gifts from the trust principal. Hence, there is always at least one person who can receive the trust principal if need be.

Asset protection trusts are complicated and require the help of an experienced estate planning attorney. However, when used properly, asset protection trusts can address unanticipated creditors, long-term care costs and even unintended tax liabilities. If you would like to learn more about asset protection, please visit our previous posts.

Reference: The News Enterprise (March 4, 2023) “Asset protection is major concern of aging population”

Photo by Karolina Grabowska

Planning for Long Term Care Is Important

September 15, 2022

Elder law attorneys have far too many stories of people who fail to plan, plan incorrectly or incompletely, or plan to fail by doing nothing at all, as described in the article “Elder Care: People in a pickle” from The Sentinel. Planning for long term care is important. Here’s a sad story.

A woman calls the elder law office because her husband fell at home—a common occurrence among the elderly. He was hospitalized and is now receiving rehabilitation in a nursing home. The treating physician recommends that the husband remain in the nursing home because he has significant limitations and his wife, who has her own medical issues, isn’t physically able to care for him.

The wife agrees. However, she has a host of challenges to overcome that were never addressed. The husband took care of all of the finances, for decades telling his wife not to worry. Now, she has no idea what their resources are. Can they afford to pay for his nursing home care? She doesn’t know. Nor does she have the authority to access their accounts, because there are accounts in her husband’s name only and she does not have access to them.

Her husband’s insistence of being the only one in control of their finances has put her in a terrible predicament. Without the estate planning documents to give her access to everything, including his own accounts, she can’t act. Can he now sign a Power of Attorney? Maybe—but maybe not, if it can be shown he lacks capacity.

If the couple cannot pay the nursing home bill, they have given their children a problem, since they live in Pennsylvania, where the state’s filial support law allows the nursing home to sue one or more of the children for the cost of their parent’s care. (This law varies by state, so check with a local elder lawyer to see if it could impact your family). Even if the wife knew about the family’s finances and could apply for public benefits, in this case his eligibility would be denied, as they had purchased a home for one of their children within five years of his being moved to the nursing home. Medicaid has a five-year look back period, and any large transfers or purchases would make the husband ineligible for five years.

If this sounds like a financial, legal and emotional mess, it’s a fair assessment.

Unexpected events happen, and putting off planning for them, or one spouse insisting “I’ve got this” when truly they don’t, takes a big impact on the future for spouses and family members. All of the decisions we make, or fail to make, can have major impacts on the future for our loved ones.

Other situations familiar to elder lawyers: a parent naming two children as co-agents for power of attorney. When she began showing symptoms of dementia, the two children disagreed on her care and ended up in court.

A father has guardianship for a disabled adult son. He promised the son he’d always be able to live in the family home. The father becomes ill and must move into a nursing home. Neither one is able to manage their own personal finances, and no financial or practical arrangements were made to fulfill the promise to the son.

No one expects to have these problems, but even the most loving families find themselves snarled in legal battles because of poor planning. Careful planning for long term care is important. It may not reduce the messy events of life, but it can reduce the stress and expenses. By choosing to exert some control over who can help you with decisions and what plans are in place for the future, you can leave a legacy of caring. If you would like to learn more about long term care issues, please visit our previous posts.

Reference: The Sentinel (Aug. 19, 2022) “Elder Care: People in a pickle”

Photo by Anastasia Shuraeva

Spotting early Dementia Symptoms is Critical

September 1, 2022

It’s easy to miss the first signs of cognitive decline. Spotting early dementia symptoms is more critical than ever: the Alzheimer’s Association projects that 12.7 million people 65 and older will have some form of dementia by 2050. That’s why a lot of research on behavioral changes associated with dementia could help in the early detection of the neurodegenerative condition. However, this subtle action is often ignored by people with dementia and their families.

Yahoo’s recent article entitled “This Is the No. 1 Dementia Symptom People Ignore, Doctors Say” explains that many people believe that memory loss is the only sign of dementia. However, there’s much more to this debilitating condition than forgetfulness. There are a number of other behavioral and psychological symptoms associated with dementia, the most common of which are apathy, depression, irritability, agitation and anxiety. The rarest symptoms are euphoria, hallucinations and lack of inhibition. Many of these are subtle at first. Therefore, understanding what to look for is critical in early detection. It can significantly affect the course of your disease and delay its progression. This behavior change can be seen many years before a dementia diagnosis.

A 2020 study in JAMA Internal Medicine found, when looking at the medical records and consumer credit reports of more than 80,000 people aged 65 and older who were Medicare beneficiaries, people who developed dementia were significantly more likely to have financial problems and poor credit scores. These financial problems became more prevalent following a dementia diagnosis.

Monica Moreno, Senior Director of Care and Support at the Alzheimer’s Association, tells Best Life, “While there are several signs or symptoms of dementia, challenges with problem-solving or planning can cause a person to mismanage their finances. Other dementia-related symptoms that can adversely affect money management or personal finances include poor judgment and difficulty completing familiar tasks.”

The study concluded that missed bill payments lead to higher penalties and interest fees that are detrimental to your financial well-being. Therefore, financial guidance is essential for dementia patients after diagnosis.

“During the early stages of dementia, a person may be able to do simple tasks like paying bills but struggle with more complicated tasks, like managing investments or making a decision on large purchases,” explains Moreno. “Since dementia is often progressive, these challenges will increase over time. Therefore, family members need to identify these potential signs early and intervene as soon as possible.”

It’s important to spot financial behavior changes for early detection of dementia. Common signs include:

The inability to balance checking accounts
Consistently making late payments on credit cards; and
Overspending.

Moreno adds, “People with dementia are susceptible to fraud, including identity theft, insurance scams and get-rich-quick schemes. Allowing these problems or potential threats to go unaddressed can put individuals living with dementia [and their families] at great financial risk.”

Spotting early dementia symptoms is critical to protecting older adults and their families from the burden of unnecessary financial stress.

The JAMA Internal Medicine study advises, “Families should be counseled about the potential need to help with financial management following [dementia] diagnosis.” If you are interested in learning more about dementia and other cognitive disorders, please visit our previous posts.

Reference: Yahoo! (Aug. 8, 2022) “This Is the No. 1 Dementia Symptom People Ignore, Doctors Say”

Photo by Vlada Karpovich

Category: Assisted Living

Selling the Family Home when a Loved One needs Nursing Care

The Difference Between Guardianship and Power of Attorney

What Exactly Is a Power of Attorney?

Guardianship: An Overview

Power of Attorney or Guardianship: Which Path to Choose?

When Is Guardianship the Answer?

Can Power of Attorney and Guardianship Coexist?

Making the Right Choice for Your Family

Key Takeaways:

Consider using a Trust Be for Long-Term Care

You Need Two Kinds of Power of Attorney Documents

Estate Planning can help address Nursing Homes Costs

Singles Need Estate Planning for Incapacity

Planning for Long-Term Care with Irrevocable Trusts

Asset Protection Trusts can address Long Term Care

Planning for Long Term Care Is Important

Spotting early Dementia Symptoms is Critical

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