Early onset Alzheimer’s: When plans are upended

Ken Sullivan and his wife, Michelle Palomera, seemed like ideal clients. Both had well-paying jobs in financial services and had been diligent savers. Their financial adviser helped them cover their bases, building their money in managed accounts while helping them plan for their two daughters’ education and their own retirement.
Long-term-care insurance wasn’t something the couple, both in their 40s, needed to worry about yet, their adviser told them.
Last year, however, Mr. Sullivan started having difficulty prioritizing and multitasking, and he was fired from his job running a trading desk at a Boston-based financial firm. Six months later, at 47, he was diagnosed with early onset Alzheimer’s.
“Financial advisers are always focused on what retirement looks like for you and how you will be happy in retirement; it’s a very positive thing,” said Ms. Palomera, 46, a managing director for TandemSeven, which helps develop technology for financial services firms. “They don’t really take you down the path of what are the worst-case scenarios.”
Mr. Sullivan is one of around 200,000 adults under age 65 diagnosed with young-onset Alzheimer’s. More than 5 million people 65 or older have the disease, which is likely to be costly. A single test can run as much as $10,000, and many of them are new and not yet covered by health insurance. Ms. Palomera worries about long-term care once Mr. Sullivan is no longer able to stay home alone. It’s too late for them to qualify for long-term-care insurance.

THE HUNT FOR HELP

One year and two advisers later, their plan is coming together, although it’s still not complete.
Their first adviser, a broker at a major national firm who had worked with the couple for just under a decade, came up with a plan that involved the couple’s getting a divorce for financial reasons. The adviser suggested they talk to a divorce attorney and then move assets out of Mr. Sullivan’s name and shield them in a trust so that he could claim insolvency and be eligible for Medicaid.
“It was a little bit of a patchwork quilt,” Ms. Palomera said. “And ethically, it didn’t seem like something we’d want to go through unless we had to.”
He did provide some helpful services, including connecting them to another family in a similar situation and providing a debit card for Mr. Sullivan to help curb spending that was being affected by his Alzheimer’s. For example, one time he brought home three ski racks, Ms. Palomera recalled. “I couldn’t figure out where he got them, and he didn’t remember,” she said.
Rejecting the idea of a divorce, the couple turned to another adviser, also from a large national firm, who met with several attorneys and vetted them before making a recommendation to Ms. Palomera. The adviser and the attorney then teamed up to hash out a new plan, trying to work through different long-term-care scenarios.

‘UNDER EVERY ROCK’

“They looked under every rock and the adviser worked with the attorney to test crazy scenarios and other trust vehicles that you can create,” Ms. Palomera said. “What does retirement look like for me, and what does long-term care look like for him?”
Ms. Palomera said she now meets with her adviser “all the time,” a significant increase from the quarterly check-ins that used to suffice before Mr. Sullivan’s diagnosis. The short-term needs are taken care of, but her retirement is still a question mark. She isn’t sure they won’t have to go on Medicaid.
“We don’t have our plan done yet,” she said. “We have our immediate stuff, but we’re still putting things in place.”
Advisers don’t have to be experts in everything to do with Alzheimer’s, Ms. Palomera said. They just need to know the right people.
“They could really be a resource if they were plugged into other resources like social workers, or able to find in-home health care or support groups or nonfinancial things,” Ms. Palomera said. “That would make the experience with the adviser much stickier.”
Ms. Palomera also suggested advisers ask medical questions as part of their planning, such as whether there is a history of such diseases running in the family.
“They could map the household of the family just to understand the dynamics and what support other family members may need or if there is a hereditary issue involved,” she said. “That question was never asked of us.”