Legal and Financial Planning 

for People Living With 

Dementia 

FACT SHEET 

Learn 

About 

• Why It’s Important 

To Plan Ahead 

• How To Plan Ahead 

• Where To Get Help 

• Advice and Things 

To Consider 

• Finding More Resources 

Many people are unprepared to 

deal with the legal and financial 

consequences of a serious illness 

such as Alzheimer’s disease or a related 

dementia. Legal and medical experts 

encourage people recently diagnosed 

with a serious illness — particularly one 

that is expected to cause declining mental 

and physical health — to examine and 

update their financial and health care 

arrangements as soon as possible. Basic 

legal and financial documents, such as a 

will, a living trust, and advance directives, 

are available to ensure that the person’s 

late-stage or end-of-life health care and 

financial decisions are carried out. 

A complication of diseases such as 

Alzheimer’s and related dementias is that 

the person may lack or gradually lose the 

ability to think clearly. This change affects 

his or her ability to make decisions and 

participate in legal and financial planning. 

People with early-stage Alzheimer’s or a 

related dementia can often understand 

many aspects and consequences of legal 

decision-making. However, legal and 

medical experts say that many forms of 

planning can help the person and his or her 

family address current issues and plan for 

next steps, even if the person is diagnosed 

with later-stage dementia. 

There are good reasons to retain a 

lawyer when preparing advance planning 

documents. For example, a lawyer can help 

interpret different state laws and suggest 

ways to ensure that the person’s and 

family’s wishes are carried out.

ALZHEIMER’S AND RELATED DEMENTIAS EDUCATION AND REFERRAL CENTER Get more facts at nia.nih.gov 1
It’s important to understand that laws vary 

by state, and changes in a person’s situation 

— for example, a divorce, relocation, or 

death in the family — can influence how 

documents are prepared and maintained. 

Life changes may also mean a document 

needs to be revised to remain valid.

Legal, Financial, and Health 

Care Planning Documents 

Families beginning the legal planning 

process should discuss their approach, 

what they want to happen, and which legal 

documents they’ll need. Depending on the 

family situation and the applicable state 

laws, a lawyer may introduce a variety 

of documents to assist in this process, 

including documents that communicate: 

• Health care wishes of someone who can 

no longer make health care decisions. 

• Financial management and estate plan 

wishes of someone who can no longer 

make financial decisions.

Advance Health Care 

Directives for People With 

Dementia 

Advance directives for health care are 

documents that communicate a person’s 

health care wishes.

Advance directives go into effect after the 

person no longer can make decisions on 

their own. In most cases, these documents 

must be prepared while the person is legally 

able to execute them. Health care directives 

may include the following: 

A durable power of attorney for health 

care designates a person, sometimes called 

an agent or proxy, to make health care 

decisions when the person with dementia 

can no longer do so. 

A living will records a person’s wishes for 

medical treatment near the end of life or if 

the person is permanently unconscious

and cannot make decisions about 

emergency treatment.

A do not resuscitate order, or DNR, 

instructs health care professionals not to 

perform cardiopulmonary resuscitation 

(CPR) if a person’s heart stops or if he or she 

stops breathing. A DNR order is signed by a 

doctor and put in a person’s medical chart. 

In addition to these, there may be other 

documents for specific health care 

procedures including organ and tissue 

donation, dialysis, brain donation, and 

blood transfusions. 

Tip: Get Permission for Caregiver Communication in Advance 

Get permission in advance from the person with dementia to have his or her doctor 

and lawyer talk with a caregiver as needed. Advance permission can also be provided to 

others, such as Medicare or a credit card company, bank, or financial advisor. This can 

help with questions about care, a bill, or a health insurance claim. Without consent, the 

caregiver may not be able to get needed information.

2 ALZHEIMER’S AND RELATED DEMENTIAS EDUCATION AND REFERRAL CENTER 
 

Advance Directives for 

Financial and Estate 

Management 

Advance directives for financial and estate 

management must be created while 

the person with Alzheimer’s or a related 

dementia has “legal capacity” to make 

decisions on their own, meaning they can 

still understand the decisions and what they 

might mean. These directives may include 

the following: 

A durable power of attorney for finances

names someone to make financial decisions 

when the person with Alzheimer’s or a 

related dementia no longer can. It can help 

avoid court actions that may take away 

control of financial affairs. 

A will indicates how a person’s assets and 

estate will be distributed upon their death. 

It also can specify: 

• Arrangements for care of minors or pets 

• Gifts 

• Trusts to manage the estate 

• Funeral and/or burial arrangements 

Medical and legal experts say that the 

person newly diagnosed with Alzheimer’s 

or a related dementia and his or her family 

should create or update a will as soon as 

possible after diagnosis. 

A living trust addresses the management 

of money and property while a person is 

still living. The trust provides instructions 

about the person’s estate and appoints 

someone, called the trustee, to hold titles

to property and money on the person’s 

behalf. Using the instructions in the living 

trust, the trustee can pay bills or make 

other financial and property decisions when 

the person with dementia can no longer 

manage his or her affairs. 

A living trust can: 

• Cover a wide range of property (including 

cars, homes, jewelry, bonds, cash, etc.) 

• Provide a detailed plan for property 

transfer or sale 

• Avoid the expense and delay of probate 

(in which the courts establish the validity 

of a will) 

• State how property and funds should be 

distributed when the last beneficiary dies

Where Can I Get Help 

With Legal and Financial 

Planning? 

Health care providers cannot act as legal 

or financial advisers, but they can encourage

planning discussions between patients 

and their families. Doctors can also guide 

patients, families, the care team, attorneys, 

and judges regarding the patient’s ability 

to make decisions. Discussing advance 

care planning decisions with a doctor is 

free through Medicare during the annual 

wellness visit. Private health insurance may 

also cover these discussions. 

An elder law attorney helps older adults 

and their families interpret state laws, plan 

how wishes will be carried out, understand 

financial options, and learn how to preserve 

financial assets.

It’s a good idea to ask about a lawyer’s 

fees before making an appointment. The 

National Academy of Elder Law Attorneys 

and the American Bar Association can help 

families find qualified attorneys. Also, a 

local bar association can help identify free 

legal aid options. See the resources at the 

end of this fact sheet for more information. 

Geriatric care managers are trained social 

workers or nurses who can help people with 

dementia and their families.

ALZHEIMER’S AND RELATED DEMENTIAS EDUCATION AND REFERRAL CENTER 3
Advance Planning Advice 

for People With Dementia 

Start discussions early. The rate of decline 

differs for each person with dementia, and 

his or her ability to be involved in planning 

will decline over time. People in the early 

stages of the disease may be able to 

understand the issues, but they may also 

be defensive, frustrated, and/or emotionally 

unable to deal with difficult questions. 

The person may even be in denial or 

not ready to face their diagnosis. This is 

normal. Be patient and seek outside help 

from a lawyer or geriatric care manager 

if needed. Remember that not all people 

are diagnosed at an early stage. Decisionmaking may already be difficult by the time 

the person with dementia is diagnosed.

Gather important papers. When an

emergency arises or when the person with

dementia can no longer manage their own

affairs, family members or a proxy will

need access to important papers, such

as a living will or financial documents. To

make sure the wishes of the person with

dementia are followed, put important

papers in a secure place and provide

copies to family members or another

trusted person. A lawyer can keep a set

of the papers as well.

Money Matters: How to Help A Person With Dementia 

Problems managing money may be one of the first noticeable signs of dementia. To 

provide support, while also respecting the person’s independence, a family member or 

trusted friend can help: 

• Watch for signs of money problems — Trouble paying for a purchase or a pile 

of unopened bills may indicate money issues. Start a conversation about available 

services to help older adults with their expenses. Giving the person small amounts of 

cash to have on hand and limiting credit cards may help manage spending.

• Set up automated bill payments — Arrange for utilities, mortgage, rent, or other 

expenses to be paid through automatic deductions from a bank account. This will 

make sure that bills are paid correctly and on time.

• Protect against scams or fraud — To lower the risk of telemarketing schemes, help 

place the person’s phone number on the National Do Not Call Registry. Consider 

registering the person for fraud alerts through their bank, credit card company, a 

national credit bureau, or other credit monitoring service. Learn more about common 

scams and frauds at www.usa.gov/common-scams-frauds.

As the disease progresses, a family member or trustee can take additional steps to: 

• Establish consent to manage finances — To prevent serious problems, consider 

being named as a legal proxy to access and manage the person’s financial affairs.

• Plan for in-home and long-term care costs — Consider options for a personal 

care assistant or home health care aide and their costs, including possible Medicare 

or Medicaid support. If the person needs more care, consider assisted living 

communities and nursing homes.

4 ALZHEIMER’S AND RELATED DEMENTIAS EDUCATION AND REFERRAL CENTER 
Review plans over time. Changes in 

personal situations — such as a divorce, 

relocation, or death in the family — and in 

state laws can affect how legal documents 

are prepared and maintained. Review plans 

regularly and update documents as needed. 

Reduce anxiety about funeral and burial 

arrangements. Advance planning for the 

funeral and burial can provide a sense of 

peace and reduce anxiety for the person 

with dementia as well as his or her family.

Legal and Financial 

Planning Resources for 

Low-Income Families 

Families who cannot afford a lawyer can still 

plan for the future. Samples of basic health 

planning documents are available online. 

Area Agency on Aging officials may provide 

legal advice or help. Other possible sources 

of legal assistance and referrals include 

state legal aid offices, state bar associations, 

local nonprofit agencies, foundations, and 

social service agencies.

Overview of Medical Documents 

Medical Document How It Is Used 

Living Will 

Describes and instructs how and when 

the person wants different types of endof-life health care

Durable Power of Attorney 

for Health Care 

Do Not Resuscitate Order 

Gives a designated person the authority 

to make health care decisions on behalf 

of the person with dementia

Instructs health care professionals not to 

perform CPR in case of stopped heart or 

stopped breathing

Overview of Legal and Financial Documents 

Legal/Financial Document How It Is Used 

Will 

Indicates how a person’s assets and 

estate will be distributed among 

beneficiaries after his or her death

Durable Power of Attorney 

for Finances 

Living Trust 

Gives a designated person the authority 

to make legal and financial decisions on 

behalf of the person with Alzheimer’s or 

a related dementia

Gives a designated person (trustee) 

the authority to hold and distribute 

property and money for the person with 

Alzheimer’s or a related dementia

ALZHEIMER’S AND RELATED DEMENTIAS EDUCATION AND REFERRAL CENTER 5
National Institute 

on Aging 

For More Information About 

Advance Care Planning for 

a Person With Dementia 

NIA Alzheimer’s and related Dementias 

Education and Referral (ADEAR) Center 

800-438-4380 (toll-free) 

adear@nia.nih.gov 

www.nia.nih.gov/alzheimers 

The National Institute on Aging’s ADEAR 

Center offers information and publications 

for families, caregivers, and health 

professionals on Alzheimer’s disease and 

related dementias, including information on 

caregiving, clinical trials, and research. Staff 

members answer inquiries by phone, email, 

and in writing and make referrals to local 

and national resources. Visit the ADEAR 

website to learn more about Alzheimer’s 

and related dementias, find clinical trials, 

and sign up for email updates. 

AARP 

888-687-2277 (toll-free) 

877-434-7598 (TTY/toll-free) 

member@aarp.org 

www.aarp.org/home-family/caregiving/ 

Centers for Medicare and Medicaid 

Services 

Fraud Prevention Toolkit 

www.cms.gov/Outreach-and-Education/ 

Outreach/Partnerships/ 

FraudPreventionToolkit 

Consumer Financial Protection Bureau 

Office for Older Americans 

855-411-2372 (toll-free) 

olderamericans@cfpb.gov 

www.consumerfinance.gov/olderamericans

U.S. Department of Justice 

202-514-2000 

800-877-8339 (TTY/toll-free) 

elder.justice@usdoj.gov 

www.justice.gov/elderjustice 

www.justice.gov/elderjustice/roadmap 

Eldercare Locator 

800-677-1116 (toll-free) 

eldercarelocator@n4a.org

https://eldercare.acl.gov 

Financial Literacy and Education 

Commission 

U.S. Department of the Treasury 

www.mymoney.gov 

800-FED-INFO 

National Academy of Elder Law Attorneys 

703-942-5711 

naela@naela.org | www.naela.org 

National Elder Law Foundation 

520-881-1076 

info@nelf.org | www.nelf.org 

CaringInfo 

National Hospice and Palliative Care 

Organization 

800-658-8898 (toll-free) 

caringinfo@nhpco.org | www.caringinfo.org 

OrganDonor.gov 

Health Resources & Services Administration 

www.organdonor.gov 

For information on health and aging, 

including resources on caregiving and 

Alzheimer’s disease, contact:

National Institute on Aging 

Information Center 

800-222-2225 (toll-free)

800-222-4225 (TTY/toll-free)

niaic@nia.nih.gov | www.nia.nih.gov 

Visit www.nia.nih.gov/health to find more 

health and aging information from NIA and 

subscribe to email alerts. Visit https://order. 

nia.nih.gov to order free print publications.

NIH Publication No. 20-AG-6422 | October 2020

6 ALZHEIMER’S AND RELATED DEMENTIAS EDUCATION AND REFERRAL CENTER