Money matters: A road map for Alzheimer's patients

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Friday, September 6, 2013


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Landina DeCarlo, 89, has been a widow for 20 years, and was financially independent for decades. But things changed when she was diagnosed with Alzheimer's disease a few years ago.

Her children handle her financial matters now, and her home is an assisted living center. The illness, which slowly erodes memory and abilities, also has required careful planning for DeCarlo's long-term care.

As many as 5.1 million Americans have Alzheimer's, according to the National Institute on Aging. Unless the disease can be effectively treated or prevented, that number will rise with the aging population. The institute estimates that the number of people with Alzheimer's doubles every five years after age 65.

Caring for a loved one with Alzheimer's can be overwhelming, and many individuals and families are unprepared to deal with the consequences, financial and otherwise.

(Read more: Alzheimer's: Are we ready for the coming epidemic? )

"I didn't want her to go away—it was hard," said DeCarlo's daughter Rita Jones, sitting next to her mother on one of her daily visits to Sunrise Assisted Living, in Cresskill, N.J. "But the decision had to be done because it was getting too hard to take care of her at home."

Jones started handling her mother's day-to-day finances when it was clear the disease was impairing DeCarlo's cognitive skills. She and her siblings met to determine who would make financial and health-care choices for their mother, who was increasingly unable to make such decisions on her own. One of Jones' brothers was given power of attorney, and the family hired an elder-care lawyer.

In addition to doing their own research, many families supporting an Alzheimer's patient find it helpful to consult with a financial advisor.

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"It's really important to understand where all expenses are going and ... to have a handle on how much it's going to cost you monthly because eventually, depending on how long that person's living, all assets are going to dwindle down," said Charles Massimo, founder and CEO of CJM Wealth Management in Deer Park, N.Y.

Paying for care can be a big concern. Basic services at an assisted living facility average about $3,500 a month, according to the MetLife Mature Market Institute. And costs can escalate quickly along with the level of care. The average price for a private room in a nursing home is about $7,200 a month.

(Read more: Pharma's Holy Grail: The next Alzheimer's drug )

The first step is to take an asset inventory, Massimo said. Then look elsewhere. For example, does your loved have a life insurance policy that has cash value, or want to look into a reverse mortgage on his or her home?

"You want to take an inventory of all the resources you have available to you," he said.

Also consult with a lawyer while the person with Alzheimer's can still make decisions about estate planning. Some of the key steps:

  • Update the will.
  • Assign durable powers of attorney for finances and health care, so that someone else can make decisions when the patient no longer can.
  • Enact a "living will" to direct the patient's health-care wishes.

Jones said that after consulting with a few lawyers she is confident DeCarlo will be able to continue to afford the assisted living center—a comfort to both mother and daughter.

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