More than half a million Canadians are currently facing some form of dementia.
While the variations are wide-ranging (including Alzheimer’s and Parkinson’s diseases), they share similar characteristics. People affected with dementia can have trouble remembering events or conversations, lack focus, and struggle with certain tasks.
Additionally, while your health can have a significant impact on your financial needs, for people with dementia, it can also affect your ability to manage your finances.
After a diagnosis of Alzheimer’s or other dementia, financial planning often gets pushed aside because of the stress and fear of the health ramifications. Medical research confirms one of the first things people have trouble with in the early stages of dementia is managing personal finances. That is why as financial advisors, we are usually the first ones to notice a change in a client’s behaviour. With years of experience in aiding with financial planning and estate planning as health deteriorates, we have accumulated a list of important actions to take when facing this challenge.
Have a conversation
It’s important to have a conversation about what needs to completed, before the symptoms become increasingly worse. This can be a delicate conversation at the beginning especially if the one affected doesn’t want to acknowledge the problem and wants to retain control. When sitting down with family members, there should be a clear understanding of who the primary caregiver will be and who will aid with the finances. Remember, it’s the family’s duty to provide support and help, not to impose their opinions. A person with dementia often feels insecure that they will lose all control quickly, so as family members, it’s best to make them feel comforted and secure. The earlier it’s caught, the slower the transition can be with help rather than taking over outright.
Update legal documents
As we age, it becomes increasingly important to have a will, power of attorney, representation agreement and other legal documents in place and ensure that they are regularly updated. The early stage of decline may be the last time a person has legal capacity to update these documents. Therefore, we cannot stress enough the importance of having these in place so that they clearly outline your wishes. We even work with our clients’ lawyers and accountants to provide the best advice so that you are prepared for the time when your family member with Alzheimer’s will no longer be able to make important decisions. Once the legal documents are in place, it is vital to discuss them with your financial team and sign the appropriate documentation so that there is no confusion.
Simplify your finances
When the symptoms of dementia worsen, it becomes harder to keep track of all your finances. This is especially true if you have investments at multiple firms and various bank accounts. Speak to your financial advisor about consolidating and simplifying your accounts. To do so, we suggest deciding on one bank and one investment firm that you trust, this transition will allow finances to be easily tracked and managed.
While it can be a tough conversation to have, make sure loved ones are aware of the legal and financial decisions that are in place. Make the financial wishes and a power of attorney clear for when dementia becomes worse. It will help avoid court actions that may take away control of financial affairs. When all parties are prepared, the experience can be less stressful and daunting.
Getting professional advice helps ensure the household finances are looked after during a difficult road ahead.
Lori Pinkowski is a senior portfolio manager and senior vice president at Raymond James Ltd. This is for informational purposes only and does not necessarily reflect the opinions of Raymond James. Lori can answer any questions at 604-915-LORI or firstname.lastname@example.org. You can also listen to her every Wednesday morning on CKNW at 8:40 a.m.