Researchers at the MIT AgeLab developed a five-topic framework to discuss Alzheimer’s disease and financial strategies. These subjects cover distinct financial-management issues and caregiving plans. Ideally, you will lead these conversations with clients and their agents in the mild decline stage of Alzheimer’s, or even before the diagnosis; however, if the client’s disease is advanced, you might need to talk solely with the client’s agent and family members.
What’s the Deal?
As a financial professional, the question isn’t “if,” but “how many” of your clients will be affected by Alzheimer’s and dementia. Therefore, it’s important for you to be prepared to help your clients understand and address the financial implications of this insidious disease.
Through our collaboration with the Massachusetts Institute of Technology (MIT) AgeLab, we’ve developed several comprehensive pieces designed to help prepare you to help clients and families plan for the costs associated with Alzheimer’s disease and other causes of dementia.
Tips for Starting the Conversation About Alzheimer's
Talking with clients and families about Alzheimer’s disease can be difficult, especially for financial professionals who might not consider it their place to broach the topic.
So What…Why It Matters
Clients afflicted with Alzheimer’s and other dementias need help preparing for the financial ramifications associated with this condition. By taking time to help, you’re doing more than dedicating yourself to a noble cause. You’re helping them address their wealth and health, demonstrating your value to clients, earning their trust, and developing relationships that can overlap generation.
Alzheimer’s Association, 2017
Communicating with Clients with Dementia [Video]
Learn these three valuable tips to effectively communicate with this clientele.
The 10 Warning Signs of Alzheimer’s
1. Memory loss that disrupts daily life
Examples include forgetting recently learned information, important dates or events, or repeatedly asking for the same information.
2. Challenges in planning or solving problems
Some people may experience changes in their ability to follow a recipe or monitor monthly bills.
3. Difficulty completing familiar tasks
People with Alzheimer’s may have trouble driving to a familiar location, managing a budget at work, or remembering rules to a favorite game.
4. Confusion with time or place
Examples include losing track of dates, seasons, and the passage of time. People with Alzheimer’s may, at times, forget where they are or how they got there.
5. Trouble understanding visual images and spatial relationships
Some people with Alzheimer’s may have trouble reading, judging distance, and determining color or contrast, potentially causing problems with driving.
6. New problems with words in speaking or writing
This involves problems with following or joining conversations. People with Alzheimer’s may stop in the middle of a conversation and have no idea how to continue. They may also have trouble remembering words to identify objects (e.g., calling a “watch” a “hand-clock.”)
7. Misplacing things and losing the ability to retrace steps
A person with Alzheimer’s may put things in unusual places. They may lose things and be unable to go back over their steps to find them again. Sometimes, the accuse others of stealing. This may occur more frequently over time.
8. Decreased or poor judgment
People with Alzheimer’s may experience changes in judgment or decision-making. For example, they may use poor judgment when dealing with money, giving large amounts to telemarketers. They may pay less attention to grooming or keeping themselves clean.
9. Withdrawal from work or social activities
A person with Alzheimer’s disease may start to remove themselves from hobbies, social activities, work projects or sports.
10. Changes in mood and personality
The mood and personalities of people with Alzheimer’s can change. They can become confused, suspicious, depressed, fearful or anxious. They may be easily upset at home, at work, with friends or in places where they are out of their comfort zone.
The 10 Warning Signs of Alzheimer’s provided by the Alzheimer’s Association®, are not always a sign of Alzheimer’s; they could be the sign of a disease that is treatable. If you are concerned about a client, encourage that person to see a doctor.
5 Steps to Preparing the Financial Strategy
When meeting with a client and family dealing with dementia, you should have a complete view of your client’s assets and how they are managed.
It is important to understand the client’s real estate situation, especially with respect to home ownership.
*Neither Transamerica nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.
Income and Insurance
You should identify all your client’s existing income sources, including benefits, where more income could be generated—such as disability payments, Social Security, annuities, and pensions—and how these payments could be affected by other changes in family circumstances such as the death of a spouse.
Also, review your client’s insurance plans to ensure they fit current and future needs, and discuss whether additional policies should be considered to fill coverage gaps. Many insurance policies and benefit programs have time-sensitive requirements. For example, some plans and services, such as COBRA and Social Security Disability Income, are only available to those under 65.
It is imperative to understand your client’s wishes and how to ensure they are fulfilled. This can involve legal arrangements that people with dementia make with their families, which can include where the client wants to live as the disease progresses, how the person wants care to be managed and delivered, and how the individual wants to ensure his or her finances will be safe.
It is difficult for most people to think about disease progression, but talking about this early after diagnosis, in the mild decline stage, can help family members learn their loved one’s wishes and help reduce stress later.
As time passes, clients may be less able to make these decisions and articulate what they want. Finally, knowing your client’s intentions about care, living arrangements, and desire to protect income for other family members will better prepare you to design an effective plan to meet the client’s needs and goals.
Banking & Administration
As a client’s health declines, the individual will need more help managing day-to-day financial affairs, including tracking expenses and paying bills.
Though family members may have taken over these responsibilities, you should ensure your client’s banking and fiscal responsibilities are being met.
Finally, your client and family must discuss how to finance and facilitate care, especially when the disease progresses and caregiving becomes more demanding.
You should talk with your client about his or her preferences for long-term care (e.g., in-home care, nursing care, assisted living, etc.) and how to pay for it.