CHAPTER TWELVE
MONEY. YOU MAY NOT WANT TO TALK about it, but if you suspect dementia or your elder has been diagnosed with dementia, then you can’t avoid it.
First, you need to make sure funds exist to take care of the person. How much is available makes a huge difference in what your plan of action will be. Then you need to make sure that this person is protected from the many, many scams that exist to separate addled elders (or isolated, lonely elders without dementia) from their savings. Then you need to set up systems that make sure the bills are paid on time. None of this is easy, but it’s essential.
In earlier, more subtle levels of the disease, people with dementia may remember the day and place where they are but lose judgment or the ability to reason abstractly (think finances). In social situations, these people sound good. But in reality, they should no longer manage their money. These are the people who used to diligently research investments but suddenly put thousands into highly speculative penny stocks because a new broker suggested it. They are people who may allow a new “boyfriend” or “girlfriend” or someone much younger to take over their financial matters.
If someone has the capacity to judge risks and benefits of a proposed intervention, then adults have “the right to be folly.” However, if an adult is suffering from dementia and lacks the ability to assess risk, that person needs to be protected from predators.
Every family’s situation is different. It’s important to consult experts—fiduciaries, elder law attorneys—to help you with the particular details of your case.
Assess Capacity
I can’t say this enough: As soon as you think there’s a problem, try to have your elder evaluated. Standard tests like the Mini-Mental State Examination (thirty questions such as “What day is it?” and “Draw this pattern”) or the Montreal Cognitive Assessment (MOCA) may be a starting point. However, I’ve often seen elders get passing scores on the MMSE but be completely unable to make a health-care decision or decide whether to stay at home or move. In fact, it is still taught in some medical texts that a score above 24 means there is no dementia and a score below means the person has dementia.
Mental capacity is the ability to make decisions for yourself. The definition of mental capacity is the ability to understand information for a decision, weigh the risks and benefits, and communicate the decision to others. Bear in mind that certain medications (including acetaminophen [Tylenol PM, which also includes Benadryl], lorazepam [Ativan], alprazolam [Xanax], and other sedating drugs) can make people seem more impaired than they actually are. Testing should be done after the medications are removed. (Sleeping pills and antianxiety pills need to be tapered slowly.) For early, less obvious cases, it’s much better to get more comprehensive neuropsychological testing instead of an opinion from a family doctor or the local neurologist or psychiatrist.
The ability to manage finances often fades long before more obvious problems arise. I’ve had patients who’ve lost houses, who’ve given hundreds of thousands of dollars to the gardener, who’ve married their caregiver who drained their bank account. Don’t let this happen to your loved one.
People usually retain the ability to make informed health-care choices longer. Still, medical care is complicated, and everyone with dementia eventually loses the ability to make informed health-care choices. It’s tragic when an elder doesn’t want extraordinary measures taken yet still ends up spending his or her last days in an intensive care unit. It’s awful to see a confused person with dementia in the hospital unnecessarily—scared, agitated, and uncomfortable.
Usually, the last capacity to go is what’s called testamentary capacity, the ability to make a will, to decide who will get your assets when you’re gone. Yet even that ability will fade in most dementia patients. Try to make things clear while you still can. It will avoid legal and financial headaches later, particularly in complicated family situations, such as blended families, those with grown children and second spouses, or when there is disagreement. Ignoring those differences will not make things better.
Look to the Future
Your family may just be reeling from the shock of a dementia diagnosis. But if your elder still retains the capacity to make decisions, now is the time to talk about how to plan for disability benefits, Medicare or Medicaid benefits, and estate planning. As all elders with dementia eventually become disabled in one or more ways, talk about what systems you want in place when that happens. How will Medicare or Medicaid factor into your family’s plans? Do the benefits of Medicare or Medicaid differ substantially from the benefits of the health insurance your elder has? If there’s a shortfall in those benefits, how will it be bridged? How should the elder’s assets be managed while he or she is alive? How will those assets be distributed after the elder dies?
Don’t wait to consider these questions. The more you can get done while your loved one can still have a voice, the better.
How to Start the Conversation
Obviously, it’s easy to say, “Take action!” It’s much more difficult to actually do something. Ideally, we’d set up these systems with our elders before they start to have problems. Alas, that rarely happens. There’s no magic way to get financial, health, and legal problems in hand.
Start first by trying to get your elder’s cooperation. Explain what worries you. Gently share examples of the kinds of things that you and other family members find concerning. Assure your loved one that you just want to make sure he or she is safe. Try to enlist the help of other family members or friends.
Sometimes, if the elder resists, it helps to point out that accepting a little help now will avoid the possibility of losing all of his or her decision-making rights sooner than necessary. Explain that if you set up systems for health care now, the elder won’t have to worry about how decisions will be made when he or she can no longer do so. By making estate plans now, your elder can be sure that his or her wishes will be honored later.
If you wait until a person no longer has decision-making capacity, it is too late to make plans. In that case, your elder and your family will have far fewer options.
If you’re lucky enough to be having these conversations while your elder still has adequate mental capacity, be sure to set up systems that can respond to many different situations. Are there family and friends who can help? Who will be in charge of finances? Who will make medical decisions? Who will manage the day-to-day running of the household and the checkbook? When the loved one loses mental capacity, who or what will manage their affairs?
Always try to separate your interests from the interests of your elder. Sometimes they can be very different. If your elder can no longer express his or her wishes, you should try to make decisions based on the elder’s beliefs, preferences, and needs.
Shelves of books have been written on estate planning, financial planning, and health-care planning. The goal of this section is simply to give you an overview. You’ll definitely need more information and expert advice to craft your family’s plan.
Degrees of Control
Whether you need to step in and help your elder with money matters, health-care decisions, or estate planning, there are legal documents, what lawyers call “instruments,” that are involved. Some documents give almost unlimited control; others give very limited powers in specific situations. It’s important to know the difference so that you can decide what makes the most sense for your family’s situation.
Before you decide to grant a relative, an attorney, or a bank these sorts of powers, make sure to check that the person or entity is willing and able to take on these responsibilities. If you’re not sure whether the document you have gives you a certain power, call your attorney and check. This will avoid many hassles.
Here are very basic definitions of these documents.
• Power of Attorney. This is a legal document that allows a person to appoint someone else to act on his or her behalf. You can limit this power to only apply in certain contexts, most commonly for financial or for health-care decisions. The person who is giving up control is called the principal. The person acting on the principal’s behalf is an attorney-in-fact. This doesn’t mean that the person actually has to have a law degree, but that they need to act in the principal’s best interests at all times. Sometimes this person is also called a proxy. A principal may give this power to one person or to several. A regular power of attorney ends when its purpose is fulfilled or with the incapacity or death of the principal.
A power of attorney may be general, in which the proxy can perform almost any act that the principal might. Or it may be limited, such as for the purpose of selling a piece of property at a particular time. Another variation is durable power of attorney, which remains effective even if the principal becomes incapacitated (see below).
These are powerful documents. They have the potential to give the proxy all the rights and powers of the principal. People with a broad power of attorney can drain a principal’s bank account in minutes or sign themselves onto the house title. It’s very important to carefully consider who is getting this kind of power.
Be Careful Whom You Trust
An elder couple hired a caregiver without going through an agency for vetting. They gave the caregiver a credit card so she could buy groceries. After a while, the caregiver convinced them to give her durable power of attorney.
The caregiver put checks in front of the couple to sign and drained hundreds of thousands from their estate. She moved most of the furniture out of the house.
When the man fell and broke his hip, the caregiver didn’t even take him to the hospital. He lay in bed for months suffering excruciating pain. The caregiver fed the couple TV dinners or, sometimes, spoiled food.
When the evidence finally became so overwhelming that authorities stepped in, the poor man had not only a twisted leg but also a urinary infection and thyroid problems. What’s worse, the greater part of the money he and his wife had saved over a lifetime had been stolen.
Don’t let this happen to your elder. Before you give anyone the power to do anything, check and check again. If you don’t live locally, make sure that someone visits your elder regularly. Do background investigations. Ask questions. Never allow a caregiver to handle finances. That crosses a line.
• Durable Power of Attorney. This works like a plain vanilla power of attorney, but it is durable. That is, it remains in effect if a person becomes incapacitated.
A durable power of attorney for health care differs from a living will in that the attorney-in-fact or the proxy can make decisions in any situation in which the person is judged unable to communicate. With a living will, the proxy may only act if the person is permanently unconscious or terminally ill and unable to communicate.
Most important is to find trustworthy people to hold the durable power of attorney for health or financial issues. One woman chose a friend because she did not trust her son. She was right. Several years later, after her dementia had progressed to the point that she was delusional and chair-bound, her son took her to his lawyer when her friend was out of town and changed the durable power of attorney to himself, then took over her house and moved her to a dementia facility.
If family members are arguing over who should be in charge or who might have taken advantage, a fiduciary may be the best option for financial issues.
• Guardianship or Conservatorship. When a person becomes unable to care for himself or herself, it may become necessary to appoint a person to take care of his or her affairs. This may be called a guardianship or a conservatorship. This requires that social service agencies or the patient’s family present evidence before a court that shows that the elder can no longer manage his or her affairs. The court may then appoint a conservator or guardian for the elder, and this person is responsible for making regular reports to the court, showing that everything is being handled legally and in the elder’s best interest.
As with a power of attorney, a conservatorship may give broad powers, granting the conservator the power to make any decision involving the elder’s life as the conservator for the person and the estate. Or the conservatorship may be limited to a particular task or a particular time period. For instance, a relative might be given the power to handle the sale of a house to pay for the elder’s care.
• Trust. A trust is a document in which one person transfers money or property to another person for the benefit of a third party. It’s also possible for a legal owner to create a trust of property without transferring that property to anyone else. Trusts are governed by the rules and limitations set out in the documents that create them. They’re complicated, and you absolutely should seek the advice of an attorney before creating one. Usually, trusts are formed when an estate has enough assets to warrant the extra complexity. Trusts are sometimes overseen by a court, but some types of trusts, like special needs or supplemental needs trusts, which are set up for the benefit of a disabled or mentally ill person, do not require the oversight of a judge.
• Will. As everyone knows, this is a document that spells out where a person wants his or her belongings to go after he or she is gone. If the patient has limited assets and a straightforward financial situation, then it may be possible to create a will from standardized documents found on many legal websites. However, if there are significant assets, it’s best to consult an attorney.
• Advance Health-care Directive. This is a generic term. This document may also be called a living will, a personal directive, an advance directive, or advance decision. It’s intended to serve as written instructions outlining what the patient wants to be done medically if he or she becomes unable to make decisions due to illness or incapacity. A living will most commonly leaves medical instructions. Many patients also decide to combine a living will with a durable power of attorney that appoints one person to make health-care decisions if they can’t.
It’s incredibly important to spell out a patient’s wishes when it comes to health-care and end-of-life decisions. End-of-life hospital care can often be unnecessarily prolonged, painful, expensive, and emotionally draining for both patients and their families.
In response to the ever-increasing sophistication of medical care and the often-unhappy outcomes in end-of-life care, the living will was first proposed in 1969. This document has yet to be standardized. Sometimes instructions in a living will fail to fully address the problems and needs of the patient. It’s important to carefully consider all possible situations. Gather information about your medical situation from your doctors and caregivers. Make sure to let your friends and family know of your wishes. Because of federal privacy laws, it usually makes sense to name a person who lives nearby to make health-care decisions if necessary.
Sometimes patients and families think that this document simply means “do not treat.” Remember that you can spell out both what you want and what you don’t want.
Here are some things to consider as you draft your living will.
• Who should make decisions if you’re not able to do so? Do you want the same person to make both medical and financial decisions? Or might two different people work better in your situation?
• What medical treatments and care do you want? What treatments frighten you?
• If you stop breathing or your heart stops, do you want to be resuscitated? Unlike the scenes in TV shows and movies, resuscitation of elders works less than 1 percent of the time.
• If you’re terminally ill, do you want to remain in the hospital or would you rather be at home?
Once you’ve drafted your advance directive, make sure you supply a copy to your physicians so that it can be placed in your medical record. Give a copy to your agent, if you’ve appointed one. Keep a copy in your own files as well.
Remember that the patient can change the directive as long as he or she retains the mental capacity.
Money Matters
Many people think that fiduciaries are all about numbers and documents, but Kim Schwarcz, who specializes in helping elder clients manage their finances, likes interacting with the people. “I treat my clients as if they were my family,” she says. “I love working with people.”
As with other legal matters, the devil is in the details.
For those with dementia, the ability to manage finances often becomes impaired long before the other symptoms become obvious. While it’s best to talk things out with your family before there’s a problem, most families don’t do this. Too often, when professionals are called in, their main job is to preserve whatever’s left of someone’s estate, says Schwarcz, who has thirty years in the field.
There are many types of financial management help.
• Representative payee. This is a person who is given the power to collect funds such as public assistance, pension, or Social Security payments on behalf of someone who doesn’t have the capacity to manage these payments. The dementia facility should never be a Rep Payee.
• Daily money manager. You can hire a bookkeeper, an accountant, or a professional agency to handle day-to-day money management for an elder. This person typically makes house calls to help with paying bills, balancing checkbooks, creating budgets, organizing tax records, and filing medical claims. The profession isn’t yet regulated, so be sure to do background checks and ask for references. It’s good to hire someone who’s bonded, or insured, to cover any problems that might arise.
• Professional fiduciary. A fiduciary has the responsibility to manage the elder’s money only for the elder’s benefit. A fiduciary can be the trustee, if a trust is in place. In some states, these professionals are called guardians.
Fiduciaries perform many of the same jobs as daily money managers, but they usually have more training. Fiduciaries may be appointed as conservators, trustees, and representative payees, or attorney to act in financial matters and/or health matters.
In some states, like California, fiduciaries are regulated by the state. There remain huge variations in the training and competence of people who call themselves fiduciaries. Do your due diligence: check references, education, and licensing, if that exists in your state.
• Estate administrator. If someone dies without a will, the court will appoint someone to administer the estate. This person’s tasks are similar to those of an executor of an estate, but the probate court usually monitors the administrator more closely.
Doing What Works
Often, the solution that makes the most sense doesn’t fit into a handy category. For instance, one eighty-five-year-old woman had lost her ability to manage her finances.
She had hired a fiduciary but was adamant about retaining ultimate control over her money.
One day, the fiduciary realized that this woman had lost the ability to write out a check. She couldn’t remember where to put the numbers and how to spell them out. So the fiduciary started filling in the payee’s name, the amount, and then spelling out the numbers. Then the fiduciary would hand the check to the woman so that she could add the final signature.
In some situations, it might have made sense for this woman to be conserved—that is, for a conservator to handle her affairs completely, with the oversight of a court. In this case, the fiduciary was licensed and bonded. The woman’s family lived nearby and kept track of how things were going.
Families need to be careful. They need to keep track. But there are no right answers. Sometimes it makes sense to just do what works.
Final Note
MY MOTHER HAD DEMENTIA, as did my grandmother and my mother-in-law. And in my practice of over twenty years, I have seen over twenty thousand elders with dementia. Every situation is different, but I have included in this guide the main themes affecting areas of care for all elders.
You are not alone. I strongly suggest finding a support group, locally or online, that can encourage, guide, and aid you on this journey.
The most important point is that there are solutions to all the problems that arise. You might not like all the solutions, but they are available. As long as you work for the benefit of your loved one, help them live the life they want (as much as is practically possible), and be available to console and to enjoy moments of joy, you are giving them the greatest gift. If it is not possible to be there in person, then assemble the team that will provide attentive, knowledgeable, timely care with an eye to engagement. A team that will fill the elder’s days with meaningful activities and meaningful relationships, and will act in the best interest of the elder’s health and finances. Even if you are the primary caregiver, having a team is essential. No one can care for another, especially an elder with dementia, alone. Studies show that caregivers risk serious decline of their own health if they do not have help.
Reading this book and having this information is a giant first step in caring for your loved one. Now, I suggest you go out for a walk. Really. Learning to pace oneself and take time for oneself is job number one for a caregiver. Yes, the elder will need someone else to supervise them while you are gone, but take time for yourself. You will have more energy, empathy, and tolerance for the quirks and demands of dementia care. Care for yourself so you can care for another. It’s a cli-ché because it is true. And when the road ahead seems daunting, remember that you can do this. What a gift you are giving!