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Legal and Financial Planning for Dementia

Aged Care

Updated 25-01-2024

Legal and Financial Planning for Dementia

Dementia is a progressive and debilitating condition that affects millions of individuals and their families worldwide. In Australia, the challenge of dementia is particularly pressing, with an ageing population and rising numbers of diagnoses. Planning for the future is crucial for those affected by dementia, as it ensures that personal, legal, and financial matters are managed according to their wishes before the condition progresses to a stage where they can no longer make these decisions themselves.

Understanding Dementia and Its Impact

Dementia describes a collection of symptoms that are caused by disorders affecting the brain. It is not one specific disease, but rather a term that covers a wide range of medical conditions, including Alzheimer's disease and other forms of memory loss. Symptoms may include deterioration in cognition, behavioural changes, and difficulty with day-to-day tasks.

The impact of dementia extends far beyond the individual; it touches family, friends, and the broader community. As such, those diagnosed with dementia and their loved ones should prioritise legal and financial planning to safeguard their rights and assets.

When a person is diagnosed with dementia, creating a suite of legal documents becomes an immediate priority. These legal preparations will assist in managing the individual’s affairs when they are no longer able to make decisions for themselves.

Future Planning and Powers of Attorney

One of the primary steps involves establishing a Power of Attorney. This is a legal document that grants authority to an appointed person or people to manage your affairs. There are different types of Powers of Attorney, each with distinct roles:

  • Enduring Power of Attorney (Financial): Allows the nominated person to make financial and legal decisions on your behalf.
  • Enduring Power of Attorney (Medical Treatment): Grants the power to make medical decisions when you are no longer able to do so.

It is critical to choose someone you trust completely to act in your best interests. This individual, known as your 'attorney', should understand their duties and be willing and able to undertake the responsibilities when required.

Advance Care Directives

Advance Care Directives allow you to document your preferences for future care and treatment and include instructions for health professionals regarding your healthcare and living arrangements, should you become unable to express these desires in the future. This might include your wishes on medical treatments and interventions, or how you would like to be supported in daily life.

Wills and Estate Planning

A legally-binding Will is a fundamental component of financial planning—to distribute your assets according to your wishes after your passing. When dementia is diagnosed, it is crucial to prepare or update your Will as soon as possible, while you still have the required legal capacity to understand the implications of your bequests.

Financial Planning Considerations

Financial planning when facing a dementia diagnosis encompasses a range of strategies to ensure ongoing management of financial affairs. It is advisable to seek advice from a financial adviser who has experience with age-related financial planning.

Understanding the Cost of Care

Long-term care for those with dementia can be expensive. It is important to project future costs and consider them in your financial planning. This includes the cost of in-home care, residential care facilities, and any medical treatments associated with the ongoing management of the condition.

Superannuation and Insurance

Ensure you understand your entitlements regarding superannuation and any insurance policies you hold. Some life insurance policies may pay out early in the case of a terminal illness diagnosis, which can be used to fund medical care and other related costs.

Government Benefits and Support

In Australia, there are support services and government benefits available to those living with dementia and their carers. These include the Age Pension, Disability Support Pension, and various subsidies that may contribute towards care costs. Engaging with a financial planner who is knowledgeable about the aged care system in Australia will be incredibly valuable.

Managing Investments and Assets

Effective management of investments and assets can play a key role in funding ongoing care. This may involve restructuring your investment portfolio or considering other assets such as property. Asset management is a complex area and obtaining professional advice is highly recommended to navigate the tax implications and maximise your financial position.

Conclusion

Legal and financial planning for dementia is a critical but often overlooked component of managing the disease. Fleshing out a robust plan which caters to both immediate and long-term needs can provide peace of mind for you and your family. Engaging with legal and financial professionals experienced in dementia-related matters can guide you through the nuances of this planning process, ensuring that dignity, autonomy, and financial security are maintained throughout the various stages of this condition.

About the Author

Olivia is a seasoned professional with an extensive career spanning the Aged Care sector, bringing decades of experience to her role. Her comprehensive understanding of Aged Care services and practices is a testament to her dedication. Olivia’s gratitude extends to those who have generously shared their knowledge and insights with her over the years, contributing to her wealth of expertise.

Olivia’s articles reflect her commitment to practical and informative content. They skillfully combine her industry know-how with real-world insights, providing valuable resources for navigating the complexities of the Aged Care sector. Olivia stands as a reliable advocate for delivering compassionate and effective care to elderly individuals, offering her support not only to fellow care workers and professionals but also to those seeking to gain a deeper understanding of the sector.

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