My Beloved Husband Has Early-Stage Dementia. He Is 'Doing Well,' but How Do I Protect Our $1.6 Million Savings Right Now?
I'm so worried about scams. And how should I structure our finances, estate and his long-term care?
Question: I am 73 and healthy, but my beloved husband has early-stage dementia. His diagnosis was a shock, but on reflection, I realize that he was starting to repeat himself and had forgotten to pay a few bills. He is doing well, yet I know he could already jeopardize our $1.6 million in savings. How can I restructure our financial plan and estate and pay for his long-term care?
Answer: I'm so sorry about your husband's diagnosis, but you are certainly not alone. Dementia is something many American families are either coping with now or might face someday. Over 7 million people in the U.S. are living with Alzheimer's, and several million more live with vascular dementia, Lewy Body and other forms of dementia or mild cognitive impairment. The total economic burden of the disease was an astounding $781 billion in 2025, according to USC.
If you're in your 70s and your spouse is starting to show signs of dementia, you may be worried about your future as well as your finances. And it's important to put protections in place for both of you. Here's where to start.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Put a durable power of attorney in place
Even if your husband is functioning fairly well now, you don't know how quickly he'll deteriorate. One major issue with dementia is that your husband might end up making reckless financial decisions due to diminished capacity. That's why it's important to protect the $1.6 million in savings you've worked hard to build.
Evan Farr, a certified elder law attorney at Farr Law Firm, says that for dementia patients, the dangers lie not just in potentially making poor investment choices but also in being vulnerable to scams and simply forgetting to pay bills. So he suggests taking steps to make sure you're empowered to make financial decisions on your husband's behalf.
"In this stage, rather than taking away control, the goal is to provide guardrails so that you can intervene should your husband lose more capacity," Farr explains. "You will want a comprehensive durable power of attorney that takes effect immediately, allows you to manage all of the bank accounts that either of you owns individually or jointly, changes the beneficiaries on any life insurance policies that you own, and establishes or modifies any trusts appropriately."
In addition to covering the financial end of things, Farr recommends updating healthcare directives so you'll have the right to make medical decisions for your husband as well. Most older types of durable power of attorney are "either limited in their scope or only take effect once your husband loses capacity," Farr explains.
Restructure your accounts carefully
You may have a number of different financial accounts, from retirement plans to brokerage accounts to a checking account where you receive Social Security benefits.
Shane O’Hara, CFP, Principal, Executive Vice President, and COO at ProVise Management Group, says, "With $1.6 million at stake, I would also look carefully at how your accounts are titled and who has access to move money."
As a starting point, O'Hara recommends setting up automated bill payments to reduce the opportunity for financial mistakes.
"Your financial adviser can also add a trusted contact designation to your investment accounts, which allows them to flag unusual activity. It is a simple but meaningful guardrail," he explains.
Farr agrees that restructuring accounts could be critical at this stage of the game.
"Account consolidation and simplification are the best ways to minimize potential vulnerabilities," he says. "Consider changing to joint ownership or other forms of account ownership where you have express permission to handle transactions."
Farr also says it's a good idea to restrict your husband's direct access to larger amounts of money. But that doesn't mean you should take it away fully.
"You do not have to completely cut him off financially," Farr says.
Instead, you may want to give your husband a small checking account for daily expenses, but keep your larger accounts restricted. You can also phase in these changes rather than implement them all at once.
The key, Farr says, is to "gradually increase your role in controlling his finances so that a single poor decision will not ruin years of savings."
O’Hara says it's a good idea to make sure your monthly Social Security benefits are deposited into an account you control directly. He also recommends reading up on the program's survivor benefits.
"If your husband were to pass before you, survivor benefit rules may change your income meaningfully. Your cash flow plan should account for that possibility," he says.
Plan for long-term care
You may reach a point where you can't care for your husband on your own. It's crucial to plan for long-term care given the very high costs.
"At $1.6 million, you have meaningful resources, but a prolonged care stay could change your picture significantly," O’Hara warns. "Your adviser should model out those scenarios so you're not making decisions in a crisis. If you have long-term care insurance, review it now and understand exactly when and how benefits trigger."
Farr explains that if you expect to become reliant on Medicaid to pay for long-term care, "timing is everything."
"Any transfers made today could subject you to a five-year lookback period under the long-term care Medicaid program," he warns.
Farr also says the time to focus on Medicaid planning is now.
"Medicaid is funded through a means-tested program that has strict transfer rules governing who can qualify for coverage," he warns. "Unless planning for long-term care takes place proactively, many individuals who are in your situation will find themselves using a significant amount of their lifetime savings prior to qualifying for Medicaid."
It's a good idea to consult a financial adviser and estate planning attorney to review these issues and make a plan.
More on Planning for and Preventing Dementia
