Legal and Financial Planning

Many people are unprepared to deal with the legal and financial consequences of a serious illness such as Alzheimer's disease. Legal and medical experts encourage people recently diagnosed with a serious illness—particularly one that is expected to cause declining mental and physical health—to examine and update their financial and health care arrangements as soon as possible.

Basic legal and financial instruments, such as a will, a living trust, and advance directives, are available to ensure that the person's late-stage or end-of-life health care and financial decisions are carried out. A complication of diseases such as Alzheimer’s disease is that the person may lack or gradually lose the ability to think clearly. This change affects his or her ability to participate meaningfully in decision making and makes early legal and financial planning even more important. Although difficult questions often arise, advance planning can help people with Alzheimer’s and their families clarify their wishes and make well-informed decisions about health care and financial arrangements.

When possible, advance planning should take place soon after a diagnosis of early-stage Alzheimer’s disease while the person can participate in discussions. People with early-stage disease are often capable of understanding many aspects and consequences of legal decision making. However, legal and medical experts say that many forms of planning can help the person and his or her family even if the person is diagnosed with later-stage Alzheimer’s.

Making a Plan to Manage the Disease

Once a diagnosis has been made, it is important to work closely with your doctor and any other caregivers to map out a plan to manage the disease.

Developing a Plan

A comprehensive financial and legal plan is important. It is helpful to plan as early as possible. Some families use the services of an elder law attorney.

A plan should consider:

  • Legal and Estate Planning: There may come a time when a person with Alzheimer's can no longer make decisions for themselves. This can create a hardship for a caregiver trying to conduct financial transactions and make medical decisions. This is one place where advance planning can be very helpful. There are several types of legal documents that can be written before they are needed to try to prevent legal pitfalls from making a difficult time for families even worse. The legal documents and the legal issues you will need to consider often differ based on state laws and the current situation of the person with Alzheimer's. For a guide to understanding options in this area, please visit the following links:
  • Identification of Local Assistance Programs: It is important to know what resources you can count on as the disease progresses and the amount and type of care that is needed changes. Please view the local resources in Caregiver Resources and Finding Alzheimer's Capable Care to identify resources in your community.
  • Optimal Living Arrangements: Many families choose to stay at home for as long as possible. In many cases subtle changes to the home can make staying a more viable option. These changes can remove obstacles that hinder care giving duties. Often the changes are designed to make the home safer for people with dementia. Information on how to modify your home to facilitate caregiving can be found in Caregiver Resources.
  • Social Security Disability Insurance: People who are younger than 65 with Alzheimer's disease can apply for Social Security Disability. The Social Security Administration recently added Early-Onset Alzheimer's Disease as one of the conditions that qualifies for the Compassionate Allowance Program. This program helps speed the processing of applications of people with certain conditions. Information on how to apply for Social Security and the Compassionate Allowance Program is available.
  • Paying For Care: Paying for medical care and long-term care services can be a major issue for family caregivers. Understanding what is covered by Medicare and what you may have to pay out-of-pocket will help you prepare for the often significant cost that can accompany caregiving. The next section, Paying for Care and Services contains links to several sources of information on what you may already be covered for and what you may have to pay for yourself.

Paying for Medical Care and Daily Living Services

Alzheimer's care can be extremely expensive. It's important to know what to expect and what resources are available to you. Care for a person with Alzheimer's is broken down into two categories, each with different sources of payment. Medical expenses are usually paid separately from the non-medical services that are needed to make it possible for someone with Alzheimer's to live at home as long as possible.

Medical Expenses

People with Alzheimer's disease require regular medical care as well as some special care that might include medications or other interventions. Medical services are often covered under medical insurance (either Medicare or private health insurance). It may be important to examine the health coverage to determine the extent of coverage limitations or co-pays and deductibles.

Medicare

Private Health Insurance

If the person with Alzheimer's has private health insurance it is important to contact the insurer and learn what lifetime maximums or other limitations you may encounter. Knowing what you are covered for in advance will help avoid surprises when coverage is denied.

Long-Term Care

Long-term care refers to a set of services and supports for activities of daily living such as dressing, bathing, eating and moving around. Medicare does not generally pay for long-term care and Medicaid is only available under specific circumstances.

Almost half of the formal long-term care provided in the U.S. is paid for out-of-pocket. While not every person with Alzheimer's disease needs long-term care, it is important to develop a plan because it can be very expensive. A list of long-term care services and their definitions is available.

Medicaid

Medicaid is a state/federal program that pays for long-term care services. The program is administered by each state so eligibility criteria and services may differ from one state to another.

It is important to learn what the rules are in your state. Each state also provides a somewhat different set of services. Nursing homes are always covered but coverage for in-home services varies.

Programs for Veterans with Alzheimer's Disease

Private Long-Term Care Insurance