Legal and Financial Planning for Those with Alzheimer’s and Their Caregivers

November 1, 2023

If you or a loved one is diagnosed with Alzheimer’s or dementia, then there are certain things that you will need to plan for legally and financially. An estimated 6 million Americans have Alzheimer’s, and it is currently the seventh leading cause of death in the United States. Alzheimer’s is a brain disorder that slowly decreases memory and thinking skills, while dementia involves a loss of cognitive functioning; both cause more and more difficulty for an individual to perform the most simple tasks. Though a diagnosis can be scary, the right planning can help individuals and their families feel more at ease.

Putting Legal Documentation in Place

Christopher Berry, Founder and Planner at The Elder Care Firm, recommends three main disability documents that should be in place.

First, there needs to be a financial power of attorney, a document that designates someone to make all financial decisions once an individual is unable to do so for themselves. If an individual lacks a trusted loved one to make financial decisions, then designating a financial attorney or bank is an option.

The next document that needs to be in place is the medical power of attorney that designates someone to make medical decisions for an individual. In many cases, it may be appropriate to appoint the same person to be the financial and medical power of attorney, as long as that person is well-trusted by the individual. In the event that something happens to the original power of attorney(s), successor (or back-up) agents for power of attorney(s) should also be designated.

The last document is the personal care plan, which instructs the financial and medical power of attorney(s) on how best to care for the individual in need. For instance, those entrusted to the care of an individual will need to make sure they sign medical records release forms at all doctor’s offices; copies of the power of attorney or living will should also be given to healthcare providers.

These three documents provide a foundation to make decisions for the individual diagnosed with Alzheimer’s or dementia when they no longer can themselves. It’s ideal to include the individual in these conversations in the early stages of their diagnosis, so that they may be a part of the decision-making process and appoint people that they will feel most comfortable with during their care.

How to Pay for Long-Term Care

Since Alzheimer’s is a progressive disease, the level of care an individual needs will increase over time. Care costs may include medical treatment, medical equipment, modifications to living areas, and full-time residential care services.

The first thing a family can do is to use their own personal funds for care expenses. It’s important for families to remember that they will also pay in their time, as many children of loved ones with Alzheimer’s or dementia will become the main caregivers. It may be wise to meet with a financial planner or sit down with other family members, such as your spouse and siblings, to determine how long some of you may be able to forgo work in order to provide full time care.

When personal funds get low or forgoing work for a period of time becomes difficult, long-term care insurance can be a lifesaver. The key to relying on long-term care insurance though is that it needs to be set up ahead of the Alzheimer’s or dementia diagnoses, so considering these plans as one ages may be smart.

Veterans can make use of the veterans benefit, or non-service-connected pension, which is sometimes called the aid and attendance benefit. This benefit can help pay for long-term care of both veterans and their spouses.

Finally, an individual aged 65 or older can receive Medicare, while those that qualify for Medicaid can receive assistance for the cost of a nursing home. If someone’s income is too high to receive Medicaid, then the spenddown is one strategy to know; under spenddown, an individual may subtract their non-covered medical expenses and cost sharing (including Medicare premiums and deductibles) from their available income. With the spenddown, a person’s income may be lowered enough for them to qualify for Medicaid.

Minimizing Risk Factors During Care

Research published recently in the journal Alzheimer’s & Dementia found that nearly half of patients with Alzheimer’s and dementia will experience a serious fall in their own home. Author Safiyyah Okoye, who was at John Hopkins University when the study was conducted, recommends minimizing risks such as these by safeguarding homes early on in diagnoses. “Examining the multiple factors, including environmental ones like a person’s home or neighborhood, is necessary to inform fall-risk screening, caregiver education and support, and prevention strategies for this high-risk population of older adults,” she states.

The good news is that since the progression of Alzheimer’s is often slow, families have plenty of time to modify the home for increased safety.

In addition to fall prevention modifications, other safety measures may include installing warning bells on doors to signal when they’re opened, putting down pressure-sensitive mats to alert when someone has moved, and using night lights throughout the home. Coats, wallets, and keys should also be kept out of sight, because at some point, leaving the home alone and driving will no longer be safe. Conversations about these safety measures, such as when an individual will have to stop driving, are ones that caregivers should have early on with their loved ones. Including individuals in their future planning while they are still cognitively sound will help both them and their caregivers feel more comfortable with the journey ahead.

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It’s important to remember that even though receiving an Alzheimer’s or dementia diagnosis can be devastating, it is not the end. People with Alzheimer’s can thrive for many years before independent functioning becomes difficult. Both patients and caregivers will feel more calm through planning ahead. Insureyouknow.org can help caregivers stay organized by storing all of their important documents in one place, such as financial records, estate planning documentation, insurance policies, and detailed care plans. Above all, there is hope for those with Alzheimer’s; research is happening every day for potential therapies and future treatments.

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Who is the record keeper?

September 17, 2019

 

Do I really need to keep this? …yes….Now where should I keep this? In the information age it seems like there is more to keep track of – but when we come down to basics there are still basic documents that we all have and need, and need to be able to find. There is a lot of information online – bank statements, mortgage payments, bills, paystubs – but what happens when your circumstances change or the information system shuts down. Is there a way for you to get what you need – or your family members?

  • Weeks. Paper receipts. The grocery store, gas, eating out. These receipts are not necessarily for long term record keeping – but they help when the credit card statement and balancing the checkbook routine comes. According to Experian research – the average U.S. consumer has an average balance of $6,354 on their credit cards. Without the paper receipts to verify transactions – the extra $100-$300 in excess charges or fraud may not be detected. After the monthly verification – the paper receipts can be discarded. Preferably in the shredder.

 

  • Years. The ones that come to mind are the tax returns, mortgage payments and warranties. These are usually in a drawer or stuffed in a cupboard – “somewhere” and may not be accessible in an easy way. The ones that slip the mind and can be difficult to keep track of are the medical bills and plans. Even if you have changed employers, doctors or plans – there is no record of your medical history and payments other than you. Pre-existing conditions or the blood-test that didn’t get sent to the insurance company can come back years later when you interact with the same providers again. Suze Orman has an article on other documents that we should have in our record box.

 

  • Forever – These are the one that we mention on most of our blogs and the things that are, hopefully, in our safe places. Give yourself time to get these together. Your birth certificate (and those of your household), Marriage License(s),(it is key to continue to keep the marriage license of previous marriages even if they have been officially annulled),  the Adoption papers and Death certificates. Wills and Death certificates (of anyone that may be connected to your life and could have influence in your future holdings). To get a copy of most of these documents – you need to make a request at the county where the event occurred. This can be tricky when a person is born or dies in a place other than their usual place of residence. If you are unable to physically go to the county clerk office – there are third-party groups that, for a processing fee, will be able to help you get the documents you need.

As you hit the deadlines of storage – don’t forget to dispose of your paperwork carefully. Saving the planet by utilizing the recycling bin is all in good nature, but identity theft is real and has happened to 1 out of every 15 Americans. Consider investing in a home shredder that can be used on a daily basis. Alternatively there are often community shredding services multiple times a year when you can take boxes of paperwork to be safely shredded. For a fee, local office supply stores will also shred important documents.

As you reach to begin the record keeping process and shred those papers, remember InsureYouKnow.org product offerings may be your answer. It’s a safe place to digitally store all the information in case you need to access it remotely – or from the comforts of your own home. Taking stock of your records, memories and your current resources with an annual plan, may provide the peace of mind you’ve been looking for.

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Go figure – it’s Fathers’ Day

June 14, 2019

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Happy Father’s Day to all the dads, fathers, papas, grandfathers and father-figures in our lives. The world would not be the same without them. Since 1910, the USA has honored the third Sunday in June to remember the “contribution that fathers and father figures make to the lives of their children.” As other countries have adopted this custom, some in August, September or December, the celebrations usually involve gifts and food.

Although the role of the father as being the breadwinner in the family, the one with the full-time job, or the one that leaves to go to work every day is not always the norm – there is still popular public opinion that this is the case. According to the Pew Research Center, in the United States only a quarter of families with children under the age of 18 have a father that is the breadwinner. That means that men are connecting with children in a different way to the 1970s, when almost half of these couples (47%) were in families where only the dad worked.

Do we have more money now than in our father’s generation? Where do my resources go? Father’s Day, like so many events, can often be a time of reflection. Does our habitual nature with finances stem from our father-figures’ habits?

  • Spending. Work hard, play hard. For so many of us, the money is a means to an end. After the bills are paid – what makes us and our families happy? Is it the latest gadget or home improvement, the presents for the children, or the holidays and excursions? If your father-figure showed love and excitement spending on summer vacations with ice-creams and beach time, it is likely you will be doing a similar thing.
  • Saving. Keep the money for a rainy-day – or for large events. The price of college, weddings, first-homes are skyrocketing. It’s not just a phrase about the good ol’ days – the dollar used to go much further. According to the CPI Calculator in 1910 $100 would buy the same as $2500 would buy today. With unemployment rates high and pay for jobs low, it is pretty difficult to cross the threshold from poverty to middle class, from middle class to rich, and rich to wealthy. Foregoing the restaurants and the international travel for 529 plans and down-payments on homes are options we can provide our children.
  • Scaling Back. As we are encouraged to look ahead and plan for retirement and downsize – do we need the large home, the extra vehicles, the tax-rate for the school districts that we are currently in? Some current trends involve the KonMari method in finding joy in our possessions and discarding or rehousing others. Are our loved ones living in different states or countries that we don’t get to connect with because of distance. Perhaps owning a smaller property or finding a space in a favorite location is the best use of the resources now.

As you place yourself in the category that best fits you – and there is no-one that stays stagnant in their mindset – each requires monitoring of your assets to fit the lifestyle that you desire. This takes time and work, but there are tools out there that are designed to simplify your life, and give your family the visibility into your world.

As you reach to contact the father-figures in your world, or are considering a Father’s Day gift to remember – InsureYouKnow.org product offerings may be your answer. It’s a safe place to store all the information in case you need to access it remotely – or from the comforts of your own home. Taking stock of your memories and your current resources with an annual plan.

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Rеtіrеmеnt Plаnnіng

August 31, 2016

Plаnnіng fоr уоur rеtіrеmеnt іѕ nо ѕmаll tаѕk. It rеԛuіrеѕ thаt уоu knоw hоw muсh mоnеу уоu wіll hаvе ѕаvеd uр, аnd hоw muсh уоu wіll nееd реr уеаr fоr еасh уеаr аftеr уоur rеtіrеmеnt. Bоth оf these fасtоrѕ аrе whаt mаkе rеtіrеmеnt fіnаnсіаl рlаnnіng ѕо dіffісult, ѕіnсе уоu hаvе tо kеер trасk оf уоur rеtіrеmеnt ѕаvіngѕ ассоuntѕ аnd іnvеѕtmеntѕ, аѕ wеll аѕ уоur ѕtаndаrd оf lіvіng аnd thе аmоunt іt соѕtѕ tо kеер іt uр.

Thе 403b retirement рlаn іѕ аvаіlаblе tо US rеѕіdеntѕ wоrkіng іn ѕресіfіс ѕесtоrѕ, аnd оffеrѕ аn аttrасtіvе аltеrnаtіvе tо thе uѕuаl 401k. Emрlоуееѕ whо аrе еlіgіblе fоr thе 403b wоrk іn оrgаnіzаtіоnѕ thаt аrе tаx еxеmрt, рublіс ѕсhооlѕ, оr аrе ѕеlf-еmрlоуеd аѕ a rеlіgіоuѕ mіnіѕtеr. Thеrе аrе bеnеfіtѕ fоr bоth thе еmрlоуее аnd thе еmрlоуеr іn сhооѕіng a 403b.

Mаnу соmраnіеѕ uѕе thеіr 403b рlаnѕ tо аttrасt аnd rеtаіn thе bеѕt саndіdаtеѕ fоr еmрlоуmеnt. Onе rеаѕоn whу еmрlоуееѕ bеnеfіt frоm thе 403b іѕ thаt іt hаѕ аn еxсеllеnt mаtсhіng рlаn. Thеrе іѕ аlѕо nо nееd fоr еіthеr thе соmраnу оr thе еmрlоуее tо рау tаx оn соntrіbutіоnѕ thаt аrе gоіng іntо a 403b. Thе recipient оnlу hаѕ tо ѕtаrt рауіng tаx whеn thеу bеgіn tо wіthdrаw fundѕ.

Thеrе is a mаxіmum аmоunt, whісh саn bе раіd іn thаt іѕ ѕеt fоr еvеrу уеаr, аnd employees wіll оnlу rесеіvе thіѕ mаxіmum іf thе соmраnу іѕ dоіng wеll.

It іѕ аlѕо роѕѕіblе tо tаkе оut a lоаn аgаіnѕt thе ассumulаtеd fundѕ іn a 403b, whісh саn bе uѕеful іn аn еmеrgеnсу. Tаkіng оut tуре оf lоаn аnd mаkіng rерауmеntѕ tо іt wіll hаvе tаx соnѕеԛuеnсеѕ, hоwеvеr.

If thе еmрlоуее wіѕhеѕ tо wіthdrаw fundѕ frоm thе 403b bеfоrе thеу hаvе rеасhеd thе еxресtеd аgе оf 59.5 уеаrѕ, thеrе wіll bе fіnаnсіаl реnаltіеѕ. Onсе thе rесіріеnt іѕ оvеr thе аgе lіmіt thеу wіll оnlу bе сhаrgеd tаx fоr thе аmоunt thаt іѕ tаkеn оut, but younger реорlе wіll аlѕо hаvе tо рау аn аddіtіоnаl реnаltу оf 10%.

Pеорlе whо оwn оvеr 5% оf thе соmраnу thаt thеу аrе wоrkіng fоr аrе ѕubjесt tо аddіtіоnаl rulеѕ. Thіѕ іѕ іn оrdеr tо рrеvеnt thе wеаlthіеѕt mеmbеrѕ оf ѕосіеtу frоm uѕіng thе 403b tо ассumulаtе vаѕt аmоuntѕ оf tаx-frее ѕаvіngѕ.

Onсе thе еmрlоуее іѕ оf rеtіrеmеnt аgе thе аmоunt thеу hаvе ѕаvеd іn thе 403b wіll bе dіѕtrіbutеd ассоrdіng tо hоw muсh thеу hаvе ѕаvеd аnd thеіr еѕtіmаtеd lіfе еxресtаnсу. Thіѕ аіdѕ іn dіѕtrіbutіng thе fund in a fаіr mаnnеr. However, іf уоu dо nоt tаkе аt lеаѕt thе mіnіmum рауmеnt аvаіlаblе, уоu wіll bе сhаrgеd tаx оn your 403b ѕаvіngѕ аt a vеrу hіgh rаtе.

Emрlоуееѕ whо аrе еlіgіblе fоr a 403b ѕhоuld tаkе thе tіmе tо mаkе ѕurе thеу undеrѕtаnd bоth thе ѕаvіngѕ thеу саn mаkе оn tаx whіlе thе funds аrе bеіng buіlt uр, аnd thе іntеrеѕt, саріtаl gаіnѕ аnd dіvіdеndѕ thеу саn rесеіvе frоm thе рlаn.

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Retirement Planning Tool

August 13, 2016

Planning for retirement? Here’s what you need to know

When it comes to planning for retirement, most people recognize the importance of saving as early as possible but a majority of them do not get started for one reason or the other. Some just don’t have the right mindset for saving while others simply do not have the right knowledge on how to handle their financial planning for a happy retirement.

To address this, we have put together this guide that will help get your investment and retirement planning in order by taking advantage of financial resources and tools such as retirement planning calculator, stock calculator online and investment calculator online.

Let’s get started.

Pay off the expensive debt first

The best thing you can do to maximize your retirement savings is to pay off your debts especially the ones with high interest. This includes credit card debt and car loans which can be toxic for your finances. No matter how much you can possibly regain through savings and investing, this debt will always come out as a net negative for you. So, pay off your expensive credit card debts and car loan first if you really want to supercharge your retirement savings.

Have an emergency fund

A surefire way to put a dent in your savings plan is by not having an emergency fund in place. By doing this, you put yourself at the risk of turning to high-interest credit card debt when an emergency arises which, as mentioned earlier, is something you really don’t want to do. As a general rule of thumb, it is advisable to have at least three to six months’ worth of living expenses in your emergency fund. That way you won’t need to resort to expensive credit card loans in a time of crisis.

Make full use of employer match

If your job comes with a paid-for employer match for your 401k account, take full advantage of it by using it to full capacity. Let’s assume that your employer matches 50 cents for every $1 that you invest, up to a limit of 6 percent of salary meaning that if you invest the full 6 percent of your salary, the employer will invest an additional 3 percent.

In total, you will be putting a healthy 9 percent of your salary towards your retirement. You can use our Retirement Planning Tool to obtain a projection of how maximizing your 401k savings account can affect your retirement plan.

Make and follow a budget

Knowing all your expenses whether big or small and then adjusting them according to your income is a no-brainer if you really want to retire with financial freedom. This can be achieved by budgeting your finances and keeping a track of all your regular expenses and bills. When you know that you need to set aside a specific amount for these expenses each month, you are more likely to make room for savings.

One way to optimize your budget for retirement savings is to categorize your savings as a recurring monthly ‘expense’ rather than literal ‘savings’. You can do this by opening a separate savings account that automatically takes money from your main salary or business account ensuring that laziness or excessive spending doesn’t get the better of you.

Have a solid Financial Plan

While saving money is important, knowing where to invest the money you save for maximum returns is even more important. The process starts with figuring out your existing savings and knowing how much money you’ll need once you retire.

As a general rule, you should plan to have 80 percent of your current annual income in retirement. Adjust this amount with any projected retirement income such as pension or social security and you will get the exact amount you’ll need per year in retirement.

Next is to have a balanced asset allocation strategy and invest your money so that it continues to grow before and after retirement. The best way to achieve this is to diversify your assets in different avenues such as stocks, bonds, commodities and emerging market equities. This protects your investment against any potential volatility in the markets and helps you come out on top in the long run.

Use our online investment calculator to find out the approximate rate of return on your investments by testing a variety of asset allocation scenarios.

Revise your asset allocation over time

With time, your financial situation changes and as you edge closer to retirement you would want to have more easily accessible income. This can be achieved by tweaking your asset allocation as your needs change.

If you have started saving at a young age and don’t have a family to support for the initial few years of your career, it would be wise to keep a majority of your portfolio in growth assets with maximum return. As you grow older, you can move more of your assets to fixed income options such as bonds and high dividend stocks.

Having said that, by no means you should move all your investment away from growth assets as you want your money to do the work for you even after you retire.

Use our online stock calculator and online investment calculator if you need to figure out your ideal asset allocation based on your individual situation, preferences, and retirement goals.

Make use of tax-advantaged retirement accounts

When saving for retirement, one way to fast-track your progress is to make good use of special retirement accounts that are given a tax break from the government. These include 401(k), traditional IRA and Roth accounts allow of which allow you to contribute up to $5000 per year.

With these accounts, you have the option to take out contributions and earnings without paying any tax during retirement. In some cases, you have the option to pay income tax upfront and avoid capital gains and interest taxes in the future. In short, a 401(k), 403(b) and an IRA are all fantastic retirement account options.

Conclusion

To sum it up, starting out as early as possible, using the right retirement planning tools and some careful planning can go a long way towards comfortable retirement. Here at Insure You Know, we understand this fully which has led us to build powerful stock calculator and investment calculator that you can use online to plan your retirement.

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