When a loved one begins showing early signs of memory loss or cognitive decline — such as repeating questions, missing bill payments, or getting confused about appointments — most families’ primary concern is medical care. That instinct isn’t wrong, but it’s incomplete.
Some of the most important decisions a family will make in the months that follow the symptoms or diagnosis of cognitive decline or dementia are financial, not medical, and the window to make them correctly and thoroughly tends to be shorter than people expect.
We’ve developed five basic steps that you can take — as part of a process starting at home and eventually involving your financial advisers — to ensure your loved one will be financially supported and that their intentions are known and carried out.
None of these steps can predict what the future holds, but taken together, they can create a comprehensive, flexible framework to help families make the hardest decisions with greater confidence.
I’m not just speculating — I’ve witnessed this as a professional who walked beside families who find themselves at this critical juncture.
Step No. 1: Compile information and write a plan
A physical and cognitive evaluation is an important first step, but so is understanding the full financial picture: Cash flow, insurance coverage , legal documents, the living situation and who is available to help.
This is also the moment to build a care team — close family or friends, a physician, a financial adviser and an attorney — so when decisions need to be made, the right people are in the room.
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Gathering the information for a full financial picture and a care team might feel frightening or overwhelming, but uncertainty is almost always more expensive than clarity.
Step No. 2: Clarify your goals
What does “independence” mean to your loved one? Is staying in their own home the priority, or is proximity to family, social connection or freedom from home maintenance more important?
These are deeply personal questions, and the answers should come from early conversations , not assumptions made under pressure later.
It’s also worth pressure-testing the financial assumptions behind those preferences — aging in place isn’t automatically the cheaper option once home modifications, caregiving labor and ongoing support are factored into the plan.
Step No. 3: Make documentation current and bring in financial professionals
Conversations establish wishes. Documentation ensures those wishes are carried out.
Review healthcare and financial powers of attorney , advance directives , beneficiary designations and account records with your loved one and with their adviser or other financial professionals and confirm they’re up to date.
Waiting too long to put these documents in place is one of the most common — and most avoidable — mistakes families make, because a loved one might know exactly what they want and still be unable to act on it without the proper legal authority.
Bringing a registered investment adviser (RIA) into the conversation and process early, alongside other credentialed professionals such as Certified Financial Planners (CFPs), certified public accountants (CPAs), and estate attorneys, helps ensure nothing falls through the cracks.
Step No. 4: Prepare to provide support
Once your loved one’s priorities are known and documented, the next step is to tend to the practical realities of providing support.
On the safety side, that can mean home modifications, transportation alternatives, meal delivery or companion care — small, often lower-cost measures that meaningfully reduce the risk of a fall, a missed medication or financial exploitation.
On the financial side, it means understanding that healthcare coverage and long-term care are not the same thing. Medicare might cover medically necessary services, but the custodial, day-to-day care many people suffering from dementia eventually need — help with bathing, dressing, preparing and eating meals and medication reminders — generally falls outside that coverage and is usually paid out of pocket.
Reviewing costs, insurance benefits, and personal resources before this type of care becomes urgent avoids a painful surprise later.
Step No. 5: Revisit the plan frequently and adapt as needed
Even the most thoughtfully constructed and thorough financial plan isn’t permanent. Health changes, family relationships and dynamics change, and a home or arrangement that works well today might not work in five or 10 years.
Planning ahead doesn’t mean committing to one path for good — in many ways, it means the opposite: revisiting the plan periodically and ensuring decisions remain aligned with a loved one’s intentions as circumstances evolve.
Start the conversation before a crisis
Every family, diagnosis and financial picture is different, which is why these conversations shouldn’t be delayed until they become urgent.
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Families who navigate planning for loved ones experiencing cognitive decline with the least stress are usually the ones who started talking — with one another and with trusted medical, legal and financial professionals — while they still had the luxury of time.
Sometimes the best place to begin is also the simplest: In your home with the family members and friends who care most. Expand the conversation to the financial professionals who have the best interests of your loved one, and your family, at heart.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA .
