Peace Of Mind Planner: 7 Legal And Financial Essentials For Dementia Patients And Caregivers

Guest Post By: Christine O’Connor

Caring for a loved one with dementia involves more than medical and emotional support. It requires strong financial and legal planning to protect both you and your family member. This handy guide can help you navigate these responsibilities.

1) Legal Documents

Why it matters:

Dementia can progress quickly, limiting decision-making ability. Having legal documents in place early ensures you or your loved one’s wishes are honored and prevents costly legal battles.

Power of Attorney (POA) for healthcare and finances

Tip: Choose a trusted person who understands your loved one’s values. Ensure the POA covers both medical and financial decisions.

Living will/advance Directive

Tip: Discuss care preferences (life support, feeding tubes) while your loved one can still communicate their wishes.

HIPAA Authorization (to access medical information)

Tip: Without this, you could be denied access to medical records. Keep copies in your caregiver

files.

Will or Trust (estate planning)

Tip: Setting up a trust can help avoid probate and protect your loved one’s assets. Review with an estate attorney.

Guardianship Considerations (if POA is not in place)

Tip: If POA isn’t in place and your parent or partner loses capacity, you may need court-appointed guardianship—this is time-consuming and expensive, so plan ahead.

2) Financial Accounts & Access

Dementia can lead to missed bills or financial exploitation. Secure your account access early to prevent fraud.

List of all bank accounts, retirement accounts, investments

Tip: Create a master list with account numbers and institutions

Ensure joint access or POA authority for financial transactions

Tip: Banks often require their own forms—don’t assume POA alone is enough.

Review

Automatic bill payments and subscriptions

Tip: Cancel unnecessary services to reduce costs.

Secure online account credentials in a safe place

Tip: Use a password manager or store in a locked file. Avoid sticky notes on desks.

3) Insurance Coverage

Why it matters:

Insurance can offset huge care costs. Make sure you understand what your coverage includes and how to file claims.

Health insurance (or Medicare/Medicaid eligibility)

Tip: Check if supplemental plans cover dementia-related services.

Long-term care insurance

Tip: Review policy terms—some require proof of cognitive decline for benefits.

Life insurance policies

Tip: Confirm beneficiaries and whether accelerated benefits apply.

Homeowners/renters insurance (check coverage for in-home care)

Tip: Ensure coverage for in-home caregivers or medical equipment.

4) Income & Benefits

Why it matters:

Maximize available employer and government benefits to ease financial strain.

Social Security Benefits

Tip: Explore disability benefits if you or your loved one is under retirement age

Veterans Benefits (if applicable)

Tip: Aid & Attendance can help pay for home care.

Disability Benefits (if applicable)

Tip: People with dementia can quality under certain circumstances. Apply early—assessments may be required and approval can take months.

Employer Retirement Plans or Pensions

Tip: Contact HR or the plan administrator for payout options.

5) Budget & Expenses

Why It Matters:

Dementia care costs can escalate quickly. Setting up a budget and tracking expenses can help your money last longer and allow you to plan for future needs.

Estimate monthly care costs

Includes home care, adult day care, and facility care.

Tip: Don’t forget to include home modifications, respite care, and transportation.

Plan for medical expenses and medications

Tip: Use a spreadsheet or budgeting app to track recurring costs.

Create an emergency fund for unexpected costs

Tip: Aim for 3–6 months of expenses to cover unexpected hospitalizations or urgent care.

Track tax implications Includes medical deductions and caregiver credits.

Tip: Caregiver tax credits and medical deductions can reduce your tax burden—consult a CPA for guidance.

6) Asset Protection & Planning

Why it matters:

Explore these options to protect assets from unnecessary depletion.

Consult an elder law attorney

Tip: They can advise on Medicaid planning and asset transfers.

Review Medicaid spend-down rules

Tip: Improper transfers can trigger penalties—get professional guidance.

Consider trusts or asset transfers for long-term planning

Tip: Special Needs Trusts can preserve eligibility for benefits.

7) Documentation & organization

Why it matters:

Quick access to documents saves time during emergencies.

Keep all documents in a secure, accessible location

Tip: Create a Caregiver Binder with sections for legal, financial, medical, and emergency contacts. Keep a digital backup (in a secure cloud service or use a fireproof lockbox or safe.)

Maintain a contact list (for attorneys, financial advisors and care providers.)

Tip: Include phone numbers and email addresses for quick reference.

Update documents regularly (as circumstances change)

Tip: Review every 12 months or after major life changes

Dementia changes a lot, often faster than we expect. Having these pieces in place won’t make the journey easy, but it can make it steadier. When the hard moments come, you’ll be glad you took time to prepare now. Come back to this checklist as things change, ask questions when you need to, and lean on professionals for guidance. Taking care of these details is one more way you’re showing up for the person you love — and for yourself, too.

Whether you’re just beginning this journey or already deep in it, you don’t have to figure it out alone. Download the Simon App or Join our community of Simon App Testers.