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As our population ages, dementia is becoming more prevalent. An estimated 5.6 million Americans currently have dementia.1 The US Administration for Community Living estimates that more than 80 million Americans will be age 65 and older by 2040.2 Rates of dementia, which is a loss of brain function that affects memory, thinking, language, judgment, and behavior, increase with age, and unless a cure or new treatments are found, costs from dementia could come close to doubling by 2040, as the number of older Americans increases. The disease is not only debilitating; it’s also expensive. The direct costs of caring for those with dementia to American society in in 2020 was an estimated $305 billion.1 Those costs include drugs, medical treatments, and assistance with day-to-day living, and they top or equal the costs of other diseases like heart disease and cancer.
Based on those stats, it’s important that you consider making an estate plan before you or a loved one is affected by the disease.
The following are some important points to help guide you through the process.
Everyone.
Dementia affects one’s ability to think clearly and participate meaningfully in decision-making, which makes early legal and estate planning even more important. Strive to get an estate plan in place as soon as possible, while you and your loved one are still of sound mind. If you wait until signs of dementia start showing, the estate plan could be invalid because the person wasn’t of sound mind.
Since laws vary from state to state, everyone’s situation is unique, and there are several legal documents that need to be prepared, please consult a qualified estate-planning or elder-care attorney.
In general, you can help prepare for basic estate planning in seven easy-to-follow steps:
As with all long-term planning, it is important that you review estate plans over time. Any changes in situation, such as divorce, relocation, or a death in the family, as well as state laws, can affect the outcome of how estate plans are interpreted and executed.
This article is for informational purposes only. Please consult your medical professional for information on your situation. For information about planning for Alzheimer’s, visit the Legal and Financial Planning for People with Alzheimer’s Disease Fact Sheet page on the website of the National Institute on Aging.
Customize a strategy that works best for you.
Neither New York Life Insurance Company nor its agents provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
1Stokes AC, Weiss J, Lundberg DJ, et al. "Estimates of the Association of Dementia With US Mortality Levels Using Linked Survey and Mortality Records.," JAMA Neurol. 2020;77(12):1543–1550. doi:10.1001/jamaneurol.2020.2831
2"Profile of Older Americans” Administration for Community Living, May 2021, https://acl.gov/sites/default/files/Aging%20and%20Disability%20in%20America/2020ProfileOlderAmericans.Final_.pdf
3"The Rising Toll of Alzheimer's Disease," Senate RPC, October 27, 2020, https://www.rpc.senate.gov/policy-papers/the-rising-toll-of-alzheimers-disease.