How to protect assets in case I get dementia

[joanmhe]

My parents both have/had significant alzheimer's/dementia starting in their 70s (grandmother and aunt both diagnosed with AD by age 70). I am now 53. I have significant retirement savings, and a small long-term care policy. I am single with one daughter, who is 16. I probably have 10 years to think about this, but I plan to retire by age 60 - what is the best way to protect my money, i.e. prevent me from doing stupid things when my judgment is no longer good? I will probably outlive my siblings. I need to have some in reserve for my long-term care. I do plan on trying to stay as healthy as possible, but with my genetic background, I have to plan on the worst.
I don't want my daughter to have to go through the worries that I am now going through with my own mother who is very paranoid, and irrational, even though only diagnosed as MCI (mild cognitive impairment).
So this is a financial, life strategy question. Are annuities the only strategy? A family trust?

[rei]

joanmhe, i don't have any answers to your question but i was touched by your post. my heart goes out to you and your family, and i very much hope you will get responses from people who are more familiar with investment.

[CoolBee]

I don't know whether you could explore some kind of limited power of attorney type arrangement whereby your daughter (or perhaps 2 or 3 extremely trusted people) have power to make financial decisions on your behalf in the event that 2 doctors certify you have a certain level of mental impairment?

You would have to check your country/state laws on the matter.

[The Big D]

One possibility would be to put your money in a trust for your own (and eventually your daughter's) benefit and make the trustee some financial institution. Set the trust up so that it pays you a fixed income, and then upon your death have that go to your daughter.

I'm not an expert on trusts, but if you want to let go of the financial reins, then you'll either have to give them to your daughter or some third party. The 3rd party might be preferable since she's young.

[James81]

I would talk to a lawyer about this sort of thing.

But it's good that you are having the foresight to consider it now.

[Daffy Duck]

Yes, please talk to some lawyers, for sure. This forum isn't the best place to get advice on this.

Good for you for thinking ahead!

[ar81]

Originally Posted by joanmhe

My parents both have/had significant alzheimer's/dementia starting in their 70s (grandmother and aunt both diagnosed with AD by age 70). I am now 53. I have significant retirement savings, and a small long-term care policy. I am single with one daughter, who is 16. I probably have 10 years to think about this, but I plan to retire by age 60 - what is the best way to protect my money, i.e. prevent me from doing stupid things when my judgment is no longer good? I will probably outlive my siblings. I need to have some in reserve for my long-term care. I do plan on trying to stay as healthy as possible, but with my genetic background, I have to plan on the worst.
I don't want my daughter to have to go through the worries that I am now going through with my own mother who is very paranoid, and irrational, even though only diagnosed as MCI (mild cognitive impairment).
So this is a financial, life strategy question. Are annuities the only strategy? A family trust?

Banks offer the choice of having two signatures to withdraw money from accounts.
You and your daughter should sign together to withdraw money.
Get rid of cards and go to the bank only.

Also let an option in which she can withdraw the money on her own, when you deem it as necessary.

That way you would not be able to withdraw money without supervision.

[Vanessa]

Hi Joan,

I've seen similar family planning needs where advanced planning is needed due to dementia. Things to consider are limited financial power of attorney, setting up an estate and advanced directives for your health.

You will eventually need legal help with setting this up but would recommend reading The Alzheimer's Advisor: A Caregiver's Guide to Dealing with the Tough Legal and Practical Issues by Vaughn E. James to get an overview of the kinds of things you should cover for your future and your family.

[joanmhe]

Hi,
Thank you for the responses, and the thoughts.
Some very good ideas here. I will definitely get the book and of course would involve a lawyer. I'm not wealthy, but have saved with the idea of retiring early (or down-sizing).

I may try to use the 2 signature account with my mother's accounts that have the bulk of her savings (if I can get her to agree to that), and that's a great idea for the future for myself.

Hopefully my daughter will be someone who can handle the responsibility for looking after my finances. Having to pay a financial institution would be the second alternative, though it is pretty expensive.

I know I will need a lawyer to set things up - just getting some ideas from the smart people on this forum.
Thanks again!

[joanmhe]

Originally Posted by CoolBee

I don't know whether you could explore some kind of limited power of attorney type arrangement whereby your daughter (or perhaps 2 or 3 extremely trusted people) have power to make financial decisions on your behalf in the event that 2 doctors certify you have a certain level of mental impairment?

My mother with "MCI" would be considered of sound mind legally. She passes the mini exam easily on most days. I think the tests are tuned to detect Alzheimer's, which is probably not what she has. Anyway, no 2 doctors would agree on her level of mental impairment, or her diagnosis! So I think it's best to have something in place that is automatic, irrevocable - but somehow allows some decicion-making to take place.

[Gene]

Originally Posted by joanmhe

My parents both have/had significant alzheimer's/dementia starting in their 70s (grandmother and aunt both diagnosed with AD by age 70). I am now 53. I have significant retirement savings, and a small long-term care policy. I am single with one daughter, who is 16. I probably have 10 years to think about this, but I plan to retire by age 60 - what is the best way to protect my money, i.e. prevent me from doing stupid things when my judgment is no longer good? I will probably outlive my siblings. I need to have some in reserve for my long-term care. I do plan on trying to stay as healthy as possible, but with my genetic background, I have to plan on the worst.
I don't want my daughter to have to go through the worries that I am now going through with my own mother who is very paranoid, and irrational, even though only diagnosed as MCI (mild cognitive impairment).
So this is a financial, life strategy question. Are annuities the only strategy? A family trust?

IN Illinois and some other states you can prepare a health care power of attorney and also a conditional power of attorney should you become incapacitated.

If you choose this as your plan be sure the people you name will always have your best interests as their guiding principal. Also when drawing up the documents have a primary and a list of others in the order you wish them to become your representative in case the primary and some of the others are unavailable to be your representative, if they are needed sometime in the future. People die and move away and provision for that eventuality should be part of your documents.