Planning financially for Alzheimer’s disease is a race against the clock.

This is an urgent matter because the disease is progressive, meaning the window is closing for clients to discuss their wishes about their financial, legal, and caregiving plans.

Alzheimer’s—and other common dementias—includes three basic stages: mild, moderate, and severe. Each stage has specific traits, and there are several steps you can take to help clients and families during each phase. If you suspect a client is experiencing cognitive decline, it’s critical to discuss their plans immediately.

The following characteristics and actions advisors should consider taking during each phase appear in The Financial Professional’s Field Guide to Dementia, a collaboration between Transamerica and researchers at the Massachusetts Institute of Technology (MIT) AgeLab:

1. Mild Decline

In mild decline, people with dementia typically have problems managing their bank statements and making bill payments. As a financial professional, you may notice a problem before the client’s family and friends because trouble with financial decision-making can be among the first symptoms to appear. People may also misplace things, have trouble remembering names or words, miss appointments after confusing dates, or they may have trouble finding your office.  For some, the mild stage may last several years.

Things to consider:

  • Start the conversation. Talk with clients about financial, legal, and caregiving plans. The earlier planning begins, the more involved your client will be in the process.
  • Encourage a family discussion. Advise clients to talk with loved ones about the dementia and their wishes for care.
  • Engage with families. Ask clients to bring a trusted family member or close friend to meetings. This person might eventually serve as the client’s advocate or agent under a power of attorney.  This may help save you time when the client does not remember your previous conversations.
  • Review the plan for incapacity. Ensure the advocate has legal authority through a properly executed power of attorney for finances. Without legal authority, the advocate is simply a “helper” and cannot act or give instruction on the client’s behalf. If the client decides to give the advocate legal authority through a power of attorney, the documentation should clearly state which powers are being given. It should also indicate whether the power of attorney remains in effect during the client’s incapacity (i.e. a durable power of attorney).  Also determine if your client has worked with an estate planning attorney to draft a will, living will, and durable power of attorney for health care along with the durable power of attorney for finances. Ask to remain informed about any designation changes.  Find more information in Transamerica’s Guide to Guardianship, Powers of Attorney, and Advance Health Care Directives. 
  • Understanding Your Client’s “Legal Capacity”.  Your client may need to demonstrate legal capacity— the ability to appreciate the nature and consequences of one’s actions— to make decisions and complete legal documents.  Even though your client will show signs of dementia in this mild stage, he or she may still be able to understand information, make informed decisions, and communicate those decisions to others.

2. Moderate Decline

Financial skills deteriorate further during this period, and your client will likely be unable to manage daily finances. Clients may get easily frustrated and be more socially withdrawn. Wandering can also occur in this stage. A caregiver may be needed to shop, cook, and help choose proper clothing. Clients may also get frustrated when those around them don’t remember things the same way. It’s important to understand that people with dementia have their own sense of reality. Caregivers, loved ones, and financial professionals should not correct every mistaken memory.

Things to consider:

  • Work closely with your client’s agents. Develop and maintain a close working relationship with the client’s agent—or agents—who may also serve as the client’s caregiver.  Because your client’s legal capacity can be in question, all financial strategies should be completed.
  • Remember the caregiver. Pay attention to how the caregiver is coping, and recognize this person is facing emotional and practical challenges. You can offer reassurance to the caregiver about the value you are providing as a financial professional. Ask whether the advocate is familiar with the Alzheimer’s Association® 24/7 Helpline. Help is available day or night by calling 800-272-3900.  The Association’s website, alz.org, also contains a wide array of information and resources.

3. Severe Decline

Memory worsens during severe decline, and the client with dementia will have a hard time remembering recent events, including conversations and decisions. Significant mood swings and personality changes may be prevalent, and the individual may need a caregiver to help with eating and using the toilet. In this advanced stage, the person with dementia may be bed-bound and unable to sit without support. It may also appear as though the individual cannot understand words or speech.

Things to consider:

  • Work solely with your client’s agents. Your client’s legal capacity is almost certainly lost in this stage.  If proper planning has not occurred, the courts might have to get involved.  At this stage, your goal as a financial professional should be to help family members maintain financial peace of mind so they can focus on spending time with their loved one.  Your client deserves to live his or her last few years in a comfortable and dignified manner.

To learn more, visit the Field Guide to Dementia resource page, where you can find downloadable resources, helpful information, and more.

The Alzheimer’s Association is not responsible for information or advice provided by others, including information on websites that link to Association sites and on third-party sites to which the Association links. Please direct any questions to weblink@alz.org.

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