Dementia is a challenging diagnosis that not only affects an individual's cognitive abilities but can also have a profound impact on their financial well-being. Here are seven steps to help you plan after a diagnosis.
Dementia is a topic that many may not want to think or talk about, but early financial planning is essential to ensure a smoother journey for both the person diagnosed and their loved ones.
Below is a step-by-step guide to ensure your personal finances are in place when faced with dementia:
1) Understand and accept the dementia diagnosis
Dementia is a progressive condition that impairs memory, thinking, and daily functioning, so it’s crucial to understand the diagnosis and its emotional toll. You may want to consider seeking support and counselling for yourself but also your family as a first step.
2) Legal and financial planning
Early legal and financial planning is critical following a dementia diagnosis.
Start by creating a will (if you don’t have one already) to outline your wishes. Consider setting up a Lasting Power of Attorney (LPA) as this will allow people you trust to make financial and/or health decisions on your behalf when you’re no longer able to.
3) Review financial assets
Take stock of your financial assets, including bank accounts, investments, pensions and insurance policies. Organise these documents and make sure that your loved ones know where to find them. This step simplifies decision-making and ensures your finances will be correctly managed going forward.
4) Budgeting and financial management
As dementia progresses, managing your finances will become more difficult, while professional care can be costly.
Consider setting up automatic bill payments to prevent missed payments. Review your expenses to look for areas when unnecessary spending can be reduced to accommodate for potential healthcare costs, and explore long-term care funding options.
6) Build a support network
You don’t have to face dementia alone. A support network – consisting of family members, friends, and healthcare professionals – can assist with financial and caregiving responsibilities as the condition progresses.
There are also numerous charitable organisations which offer resources and support for individuals and families dealing with dementia. These resources can include financial counselling services, legal guidance, and caregiver support groups.
Dealing with dementia can be distressing and emotionally taxing, however there are resources and support available to help – remember that emotional well-being is just as crucial as financial planning.
7) Monitor finances and carry out regular reviews
Regularly review and update your financial plans as the disease advances or your circumstances change. Consulting with a financial adviser who specialises in the area can provide invaluable guidance throughout this process to you and your loved ones.
Facing dementia is undeniably an extremely challenging and emotional journey, however it doesn’t have to mean surrendering control over your finances. By taking proactive steps early on, you can secure your financial well-being and avoid unnecessary worry and stress down the line – for both you and your loved ones.
Max Sullivan is chartered financial adviser at Kingswood Group
