How to Plan for Life’s ‘What If?’ Moments

About 8 years ago I lost my mom to complications from Alzheimer’s, a progressive disease that attacks memory, thinking and behavior. She spent a few years suffering before succumbing to this vicious disease and that is something that no individual or family should have to go through. This caused her to have to spend the last years of her life in a lock down unit at a long term care facility.  Because of this experience, I became more educated on Alzheimer’s.

As a financial advisor and because of my life’s experience I am very passionate that individuals are as prepared for the challenges of life as they can be. Despite my repeated insistence to invest in long-term care, or at least have a plan for “what if,” my mom, believed that “it” would never happen to her. Perhaps like you or your parents, she did not want to face the eventuality of aging.

Part of my professional mission is to help prepare individuals and families should illnesses, like Alzheimer’s strike. I urge you to establish a comprehensive plan – ensure your legal health, financial health and physical health.

Step 1 

Retain an attorney who specializes in advance planning. Find a lawyer who is familiar with the intricacies of elder law, which vary by state, to ensure that the patient’s and family’s wishes are carried out. It’s important to retain counsel who will help you understand the laws and will prepare documents which will withstand changes in life situations and ensure that they will be maintained and executed as one’s health declines.

Some or all of the following terms and documents may be recommended:

  • A living will records a person’s wishes for medical treatment near the end of life.
  • A durable power of attorney for healthcare designates a person, sometimes called an agent or proxy, to make healthcare decisions when the person with Alzheimer’s disease no longer can do so.
  • A do not resuscitate (DNR) order instructs healthcare professionals not to perform cardiopulmonary resuscitation if a person’s heart stops or if he or she stops breathing. A DNR order is signed by a doctor and is made part of a person’s medical chart.
  • A durable power of attorney for finances names someone to make financial decisions when the person with Alzheimer’s disease no longer is mentally capable of making such decisions. It can help people with the disease and their families avoid court actions that may take away control of their personal financial affairs.
  • A living trust provides instructions about the person’s estate and appoints someone, often referred to as the trustee, to hold title to property and funds for the beneficiaries. The trustee follows these instructions after the person no longer can manage his or her affairs. The person with Alzheimer’s disease also can name the trustee as the healthcare proxy through the durable power of attorney for healthcare.

Step 2

Retain a financial and estate management professional. Find a planner who will manage your assets based on age and risk factors and income needs. Of course as we get older, we want to make sure that we have more liquidity and less risk in our investments.

Step 3

Plan for healthcare. Find a good long-term care carrier with a wide range of options.

According to a study from Genworth Insurance, the average cost for a semi-private room is $225 per day, with a yearly cost of roughly $82,125 (this will depend on your own geographic area). The average time spent in a long-term facility is three years and experts expect a 4% increase each year, adding up to a whopping average cost of more than $225,000 for long-term illness. From experience, I can personally tell you with costs continuing to soar, future costs will be much greater. Expect to spend between $225,000 to $246,000 in today’s dollars.

Consider life insurance. For many years, life insurance has had a bad reputation due in part to unsavory sales practices in the past. But if utilized correctly, life insurance has the potential to help your family today and after you or a family member loses their battle with Alzheimer’s or another disease.

Consider the following facts:

  • Odds of being in a car accident, 3 in 900 = 0.33%
  • Odds of having residential fire, 7 in 8,900 = 0.08%
  • Odds of being admitted to critical care facility, 21 in 900 = 2.3%
  • Odds of needing long-term care coverage 630 in 900 = 70%

The most important advice I can give is to prepare early. Do something today to make your tomorrow better. I urge you not to wait until you or a loved is diagnosed. Seek help from professionals and develop a comprehensive strategy for you and your family.

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