The Importance of Financial Planning After a Dementia Diagnosis

Written by: Katie Fournier, LPN, CDP, Owner & co-founder of Ember Holistic Care LLC

A dementia diagnosis marks the beginning of a journey—one that affects not only the individual, but their loved ones, their caregivers, and anyone else that is joining them along this dementia journey.  While the emotional weight of this diagnosis is heavy, one of the most empowering steps families can take early on is establishing a clear and comprehensive financial plan.

As a dementia consultant, I walk beside families every day as they navigate the unknown. What I’ve learned is this:

Financial clarity reduces fear. Preparedness restores control. Planning protects dignity.

Why Financial Planning Matters

Dementia is progressive. This means that over time, decision-making abilities decline. Early financial planning is key to: 

• Ensures the person living with dementia can participate in decisions while they still have capacity

• Protects assets, savings, and long-term care options

• Reduces caregiver stress and limits family conflict

• Makes transitions—such as home care, assisted living, or memory care—more seamless

• Allows professionals to guide the process rather than families scrambling during crisis

Financial Planning Roadmap: From Early Diagnosis to End of a Journey

Early Diagnosis Phase: Build the Foundation

A. Begin the Conversations Immediately

This is the stage where the individual can express their wishes clearly. Discuss:

• How they want their finances managed

• Who they trust to make decisions later (Power of Attorney)

• Preferences for living arrangements as the disease progresses

• Attitudes toward spending, saving, and quality-of-life investments

B. Legal 

Establishing legal authority early prevents serious complications later.

Key Documents

• Durable Power of Attorney (POA) – for finances

• Financial Planners

• Elder Law Attorney

• Estate Planning Attorney

Early- to Mid-Stage Planning: Understand the Financial Picture

A. Take Inventory of All Finances

Caregivers and professionals should gather:

• Bank accounts & savings

• Retirement funds (401k, IRA, pensions)

• Social Security benefits

• Insurance policies (life, long-term care, supplemental)

• Debts and monthly expenses

• Real estate or property holdings

B. Understand the Cost of Care 

Costs vary widely, understanding where your loved one fits into this on the dementia spectrum is essential for planning and budgeting. Costs often include:

• Adult day programs

• Private caregivers or home health Care

• Assisted living or memory care Facilities

• Medication and specialist appointments

• Transportation

• Securing Guardianship or conservatorship and all legal fees incurred (if not planned early)

Professionals to Consult

• Financial Planner specializing in aging or chronic illness

• Long-Term Care Insurance Specialist

• Social Worker or Care Manager

  3. Mid-Stage Planning: Prepare for Care Transitions

A. Reassess Needs Every 6–12 Months

As cognition changes, new safety and care needs appear.

• Is home still safe?

• Has wandering, falls, or medication management become a concern?

• Is caregiver burnout increasing?

This is the time to explore and tour:

• Assisted living

• Memory care

• Respite care

• Adult day health programs

B. Review Public Funding Options

Depending on income, savings, and location, families may explore:

• Medicaid / MassHealth (for long-term care)

• VA Benefits – Aid & Attendance

• State home care programs

• PACE Programs (Program of All-Inclusive Care for the Elderly)

These can take MONTHS to process—starting early is essential.

Professionals to Consult

• Medicaid / MassHealth Planner

• Geriatric Care Manager

• Dementia Consultant

• Facility financial or admissions team

• Social Worker

4. Late Stage & Advanced Care: Prioritize Comfort and Dignity

As abilities decline, financial decisions should focus on ensuring consistent, compassionate care.

A. Pair Finances With Medical Needs

Discuss:

• Hospice eligibility

• Palliative care

• 24-hour supervision needs

• Specialized memory care units

B. Review and Protect Remaining Resources

Families often face guilt or fear around long-term care costs. A structured plan helps maintain dignity while honoring the individual’s comfort.

Professionals to Consult

• Hospice Team

• Geriatrician

• Dementia Consultant

• Facility leadership

5. End-of-Life, Funeral, and Legacy Planning

This step is often avoided—yet families consistently report it is one of the most relieving parts of planning once it’s complete.

A. Clarify End-of-Life Wishes

• Preferred location for end-of-life care (home, hospice house, skilled nursing facility)

• Mechanical ventilation preferences

• Comfort-only care vs. aggressive treatments, understanding costs associated with

B. Funeral or Service Planning

Decisions to consider:

• Burial vs. cremation

• Service arrangements

• Pre-payment plans to lock in prices

• Legacy choices (donations, memory funds, written letters, etc.)

Professionals to Consult

• Funeral Director

• Hospice Social Worker

• Estate Attorney

• Clergy or Spiritual Guide (if applicable)