Creating the Financial Plan for Those with Dementia


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To help guide you through the process, researchers at the Massachusetts Institute of Technology (MIT) AgeLab developed a five-topic framework to discuss financial planning and Alzheimer’s disease.

These five topics cover distinct financial-management issues and caregiving plans. Ideally, you will have these conversations with your loved one and that person’s financial advisor in the mild decline stage of Alzheimer’s, or even before the diagnosis. If the disease has progressed beyond this period, you—or the designated power of attorney—may need to have these discussions solely with the advisor. It is important for you and the advisor to understand the source and destination of your loved one’s finances so you can help when the individual may no longer be able to communicate his or her wishes.

  1. Assets
    The first thing to do when meeting with a financial advisor is to ensure he or she has a complete view of your loved one’s assets and how they are managed. The advisor should also clearly understand your loved one’s real estate situation, especially with respect to home ownership.Many older adults incorrectly believe Medicare will cover their long-term care expenses. In reality, Medicare covers care in a skilled nursing facility only for the first 100 days, so people often need Medicaid to cover long-term costs.
  2. Income and Insurance
    After reviewing assets, the focus should shift to your loved one’s income status and insurance policies. You and the advisor should work with your loved one to identify all existing income sources, including benefits, where more income could be generated—such as disability payments, Social Security, annuities, and pensions—and how these payments could be affected by other changes in family circumstances such as the death of a spouse.Also, review your loved one’s insurance plans to ensure they fit current and future needs and discuss whether additional policies should be considered to fill coverage gaps.
  3. Intentions
    It is imperative to understand your loved one’s wishes and how to ensure they are fulfilled. This can involve legal arrangements that people with dementia make with their families.These arrangements include where your loved one wants to live as the disease progresses, how the person wants care to be managed and delivered, and how the individual wants to ensure his or her finances will be safe.It is difficult for most people to think about disease progression, but talking about this early after diagnosis, in the mild stage of cognitive decline, can help you and other family members learn your loved one’s wishes and help reduce stress later.
  4. Banking Administration
    As your loved one’s financial skills erode, he or she will need more help managing day-to-day financial affairs, including tracking expenses and paying bills. Though you may have taken over these responsibilities, you should allow the financial advisor to help ensure your loved one’s banking and fiscal responsibilities are being met, both practically (e.g., bills are being paid on time) and legally.
  5. Care Management
    Finally, you and your loved one must discuss how to finance and facilitate care, especially when the disease progresses and caregiving demands intensify. You should talk with your loved one about his or her preferences for long-term care (e.g., in-home care, nursing care, assisted living, etc.) and how to pay for it.Your loved one may be involved in these decisions in the mild stage of cognitive decline; however, you may need to work directly with the advisor if the disease has advanced to the point where the person can no longer participate in discussions.


Being a caregiver can be overwhelming, and the stress associated with this critical role can make it difficult to take action. Transamerica’s Caregiver’s Guide to Financial Planning in the Shadow of Dementia, written in collaboration with the Massachusetts Institute of Technology (MIT) AgeLab, was created to help you feel confident when making decisions for, or with, a loved one living with dementia. Work with your financial advisor before taking final action.


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