The 3-3-3 Financial Plan to Deal With Alzheimer’s

by Karl on November 11, 2011[printfriendly]

The 3-3-3 Financial Plan to Deal With Alzheimer’s
by Karl Kim, CFP, CLTC

November is Alzheimer’s Disease Awareness month.

People are living longer today thanks to advances in medicine and healthy living. But with longer life comes chronic illness and disease. Alzheimer’s disease is one of the worst. It falls under the “Dementia” family.

Let’s go through some of the statistics about Alzheimer’s and you’ll see why it is one of the worst.
  • It is the 5th leading cause of death in the United States for those ages 65 and older.
  • It is the 6th leading cause of death at any age.  
  • Alzheimer’s affects lots and lots of people. About 5.4 million people have Alzheimer’s. Sadly, someone develops the disease every 69 seconds!
  • It gets worse. By 2050, the number of people with Alzheimer’s will rise to 16 million and someone will develop it every 33 seconds!
  • Today, one in eight people age 65 and older has Alzheimer’s. One in two people age 85 or older have the disease.
  • According to the Alzheimer’s Association, most people live four to eight years after being diagnosed. But some live as long as 20 years.
  • Of the Top 10 leading causes of death, Alzheimer’s is the only one with no way to prevent or cure it.

My friends, families are devastated on all levels… emotionally, physically, mentally, spiritually and financially.

The disease doesn’t play favorites. From Presidents like Ronald Reagan to famous basketball coaches like Pat Summitt to your mom, dad, brother or sister, Alzheimer’s affects just about everyone.

We’ve seen hundreds of families deal with this disease. Understandably, spouses and families will ignore the early signs and just chalk it up to getting old. That’s why you often here Alzheimer’s called “Old Timer’s”.  

We can’t prevent or cure Alzheimer’s, but we can plan and prepare for it. The earlier that you can plan, the better.

We’re not doctors. But experience has shown that, as a rule of thumb, the severity of the disease can be measured by how far back in time the person with the disease thinks they are.

For example, if an 80 year old talks about things when they were 50 years old, that is probably a little less than moderate.

But if this same 80 year old talks about things when they were 20 years old or younger, then it is probably getting severe.

We have also seen cases where the person has been fairly stable for a while, but an event like catching a cold, falling down or someone close passing away, causes the disease to rapidly progress.

According to the Novartis website,, the mild stage could be identified by:

·         Having trouble doing things that require multiple steps like a recipe
·         Getting lost, even in familiar places
·         Difficulty in doing household chores
·         Trouble remembering appointments, names, or recent events

The moderate stage can be identified by:

·         Needing help taking a bath or shower, getting dressed
·         Need help setting a table or getting out of a chair
·         Feeling restless or wandering, especially in the late afternoon or evening
·         Getting suspicious, angry, or easily upset
·         Trouble recognizing family members
·         Difficulty expressing oneself and understanding others   

Most people would prefer to keep their loved one at home for as long as possible. This may mean sharing the caregiver duties between the children or other family members.

Home care agencies can also be used to fill in the gaps and help keep the out of pocket costs to a manageable level. In general, there is no government program to help pay for this cost.

When staying home is no longer possible, the next step is an Alzheimer’s assisted living facility or a board and care home. Once again, there is no government program to help pay for this type of care. It is out of pocket.

These two options provide “stand by” and not “hands on” care. The difference is best shown in an example.

Let’s say that dad has moderate Alzheimer’s and is in an Alzheimer’s assisted living environment. A symptom of the disease is that when someone loses their temper and gets angry, they cannot bring it back under control. Often they will get violent.

When this happens, the staff cannot restrain or put their hands on dad in any way. Instead, they must call the family to intervene.

“Hands on” care is provided in a skilled nursing facility like Clearview in Gardena. Licensed skilled nursing facilities can take a hands on approach to dealing with dad and do not have to call the family. (They will go over these events in a family meeting)

Financial help for care in a skilled nursing facility can be covered by Medi-Cal (aka Medicaid) if the facility is Medi-Cal certified.

So the first step in developing a financial plan is to determine the answer to the question:

“If my loved one needs long term care help, how will they pay for it?”

Will it be:
  • Long term care insurance
  • Medi-Cal, or
  • Own income and assets   

The answer could be one, two or all three of the choices.

The answer in Step 1 then drives Step 2:
  • What type of accounts do they want to own?
  • How should the accounts be titled? 
  • Who should be the beneficiaries?

Step 3 is:
  • What kind of living trust should they have? Disclaimer or A/B?
  • What type of language should be in the Durable Power of Attorney for Asset Management? Should there be Medi-Cal and gifting language?
  • Other estate planning concerns

(You must work with an attorney that is knowledgeable in Medi-Cal. Not all estate planning attorneys know about Medi-Cal.)

Following the 3-3-3 plan, will give you a highly effective, flexible and worry free foundation for the future. It has worked for us with hundreds of families, and can for you also.

Then, whatever comes your way, you can take care of your loved one and not be overwhelmed by the financial and estate planning avalanche.
Karl Kim, CFP, CLTC is the President of Retirement Planning Advisors, Inc. and is a Medi-Cal specialist. He has submitted over 1000 applications with a 99.9% success rate over the past twenty years with a 99.9% success rate. This is meant to be an educational article. Do not make any decisions solely on the information contained herein. Consult your tax advisors, financial planner and attorney before taking any action. We are not responsible for any inaccuracies or misinformation.  
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