While we are busy preparing our 2025 taxes, those families that include a loved one living with a diagnosis of Alzheimer’s disease or another form of dementia should also be making plans to ensure the financial security of their family member.

One in nine Americans age 65 and older – including 91,000 Coloradans – are among the 7.4 million people across the United States living with Alzheimer’s disease. While those individuals and their families face daunting care challenges, financial planning expert Jim Callahan believes that the financial side of the equation is too often overlooked.

“Putting financial and legal plans in place early allows the person with the diagnosis to express their wishes for future care and other critical decisions,” said Callahan, senior advisor in the wealth management group at JFG Family Office and a member of the board of the Alzheimer’s Association of Colorado. “It also allows time to work through the complex issues involved in long-term care.”

Planning steps outlined by both Callahan and the Alzheimer's Association include:

Immediate financial and legal considerations

• Establish legal protections: Create or update a will, living trust, durable power of attorney for finances, and healthcare directive (living will).
• Designate agents: Appoint trusted individuals (agents) to make financial and medical decisions when you no longer can.
• Organize records: Compile all financial documents, including bank accounts, investments, property deeds, mortgage papers, insurance policies, and tax returns.
• Prevent fraud: Set up bank account alerts, monitor credit reports, or freeze credit to prevent scams, which often target those with cognitive decline. 

Funding long-term care

• Review insurance: Evaluate Medicare, supplemental policies, and long-term care insurance policies to determine what covers in-home care or facility care.
• Evaluate assets: Determine income sources, including pensions, Social Security, and savings.
• Explore public benefits: Research Medicaid eligibility for long-term care, and, if applicable, Department of Veterans Affairs (VA) benefits.
• Consult specialists: Engage elder law attorneys and financial planners who specialize in dementia care to help navigate complex, high-cost, long-term care planning. 

Managing daily finances

• Streamline accounts: Simplify finances by consolidating bank accounts.
• Automate payments: Set up automatic bill pay for housing, utilities, and insurance to ensure they are paid on time.
• Protect assets: Consider limiting access to large amounts of cash or credit lines to prevent impulsive, dangerous, or scam-related spending.

The cost of care

While the majority of Americans with dementia are cared for at home, the Alzheimer’s Association reminds families that the cost of professional care can be significant. Estimates for professional care in 2024 were:

• In-home care: $34 per hour or $1,360 per week
• Adult day services: $100 per day
• Assisted living: $5,900 per month or $70,800 per year
• Nursing home: $305 to $350 per day or $111,000 to $127,000 per year

For more information on financial planning, visit: Plan for Your Financial Future or alz.org, or call the Alzheimer’s Association free 24/7 Helpline at 800-272-3900.