Receiving a diagnosis of Alzheimer’s Disease can lead to a lot of questions, including what type of care the patient will need. Because Alzheimer’s is a progressive disease, the level of care changes over time and often leads to long-term care. Long-term care for someone diagnosed with Alzheimer’s could range from round-the-clock care in a memory care facility to part or full-time in-home care. Long-term care providers often assist with Activities of Daily Living, which are your basic personal tasks of everyday life like getting dressed or going to the bathroom.
With the need for long-term care comes the expense of long-term care. If someone has just received a diagnosis of Alzheimer’s or knows they have a family history of the disease, they can begin planning to hopefully lower the burden when the disease progresses to needing long-term care. The total lifetime cost of care for someone with dementia was estimated at $377,621 in 2021.
There are a variety of ways to pay for long-term care including long-term care insurance, private paying, Medicaid benefits, and veterans benefits. Most of the time a long-term care insurance policy cannot be purchased after receiving a diagnosis of Alzheimer’s, but if a policy is already in place at the time of diagnosis, you can check the policy to ensure it covers long-term care for Alzheimer’s. If you know you have a family history of Alzheimer’s and want to plan for that possibility, you can look into purchasing a long-term care insurance policy now.
Conduct a Self-Audit of Financial & Legal Documents
Planning before a diagnosis or right after receiving a diagnosis of Alzheimer’s allows you to have control over your care later and prepare for the financial burden it may bring. It is important to assess the current state of your financial and legal documents. We recommend conducting a full audit of your financial documents. Reviewing these documents can help you figure out what additional steps you may need to take to prepare for the costs that may come later.
We also recommend reviewing your legal documents, which may include a will or trust, a health care power of attorney, a durable power of attorney, a living will, etc. It is important that these documents reflect your current wishes and be strong enough to grant your designee(s) the power they need to carry out your wishes. Many people will download forms they find online and just fill in the boxes, but those may not be state-specific and could be found to be invalid.
If you do not have legal documents in place, we highly recommend that you get those in place as soon as possible. When you have sound legal documents in place, your loved ones have a much easier time going through the process of caring for you or securing care for you.
Considering the Cost of Care
After you have assessed your current financial situation, you will want to estimate the cost of care as the disease progresses. At first, you may only need someone checking in on you once or twice a day, but as Alzheimer’s progresses, you may need care for longer amounts of time or even full-time care.
First, you will want to consider what type of care you prefer. If you would prefer to have full-time in-home care before being moved to a memory care facility, you will want to ensure that you have enough funds set aside for in-home care.
If you want to have a family member care for you, you need to make sure you have had a conversation with that family member and put a plan in place for how the care will be provided. For example, will that family member continue to work or will they stay home full-time? In 2021, family members and friends provided more than $271 billion in unpaid care to people living with Alzheimer’s and other dementias.
Exploring Resources to Pay for Care
When planning for long-term care, you will want to consider both private and government resources as options for paying for care. Private resources can include:
- Personal savings and assets
- Life insurance and long-term care insurance
- Retirement benefits
- Disability insurance from an employer-paid plan or personal policy
When considering privately paying for care, you will want to make sure that any options you choose will pay for Alzheimer’s care as some of them may specifically not include paying for Alzheimer’s care.
Government resources can include:
- Supplemental Security Income (SSI)
- Veterans benefits
- Tax deductions and credits, such as the Household and Dependent Care Credit
When considering utilizing government resources to pay for care, it is crucial to pay close attention to the qualification requirements for the program(s) you may want to utilize. For example, Medicare does not usually pay for long-term care, but Medicaid does. However, you must qualify to receive Medicaid benefits as Medicaid is a needs-based program. Intending to use Medicaid benefits later on often requires its own planning.
We Can Help You Develop a Long-Term Care Plan
Having assisted many clients with long-term care planning, our team at Carolina Family Estate Planning understands that developing a long-term care plan is not just about protecting your own independence and dignity, but also about protecting those you love from the physical, emotional, and financial toll that caring for a loved one can take.
We’ve helped many clients take an interdisciplinary approach to their long-term care planning by exploring both legal and financial options. Usually, a well-rounded long-term care plan will involve a combination of legal, health care, and financial tools to meet your goals and maximize your protection.
For more information, check out our free guide to Alzheimer’s Care, and give our office a call at 919-443-3035.