Struggling with or losing the ability to manage his or her personal finances can create a host of challenges for your aging loved one with dementia and can make him or her vulnerable to elder financial abuse. Therefore, there may come a time you’ll need to step in and help them protect their money.
If your parents are getting older or get diagnosed with dementia, you’ll instinctively want to do everything you can to provide them comfort and care. 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. While people with mild cognitive impairment may be able to do simple tasks like paying for routine expenses, this change can affect their ability to make decisions and participate in financial planning. Handling their finances can therefore become burdensome and they may require help from a loved one they trust.
However, knowing when to intervene is not easy. Realizing that your parent is declining in mental sharpness is emotionally daunting and the time to talk about their finances may never seem right. It may feel like invading their privacy and you may feel uncomfortable taking on an unfamiliar role and talking to them about their finances. However, the sooner you can address the issue, the better, as delaying this talk can be costly to your parent.
Warning signs that may mean your elderly loved one is struggling with managing money:
- Trouble with common financial skills such as balancing a checkbook, calculating change, or organizing financial documents
- Forgetting to pay rent or bills or more severely, utility service disconnection or alternately paying the same bill more than once
- Missed calls from the bank
- Money missing from their bank account
- New “friends” asking for help or loans
- Out-of-character purchases or merchandise at home
How to help protect your aging parent’s finances
Talk To Them
If you see any warning signs, talk to your loved one about problems and money management as soon as possible. Familiarize yourself with their wishes, ideas, and goals for the future and make sure you emphasize to them that you only want the same as they do and are simply helping to avoid financial pitfalls that are common among people with memory loss. Make a comprehensive list of all financial and investment accounts (including household utilities, credit card accounts, and mortgage or rental information).
Gather Important Papers
If an emergency arises or your parent can no longer manage their own affairs, you’ll need access to important papers, such as a will or financial documents. Gather all important papers and documents, put them in a secure place, and provide copies to other family members or another trusted person. A lawyer can keep a set of the papers as well.
Help Set Up Automatic Payments
Utility bills, mortgage payments, and credit card payments can be taken care of automatically. Set this up together with your parent to avoid missing bills.
Sign Your Parent Up For Free Credit Reports
Federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company. This can help you keep an eye on your parent’s financial matters.
Set Up A Daily Spending Limit
You can set a daily spending limit on credit or debit card purchases, which can help your parent protect their money.
Block Unwanted Calls
The federal government’s National Do Not Call Registry is a free, easy way to reduce the telemarketing calls you get at home. You can register your home or mobile phone for free to filter out unwanted calls.
Designate A Durable Power Of Attorney
A durable POA can act on a person’s behalf financially and legally when they are no longer able to do so. For instance, they can write and deposit checks, pay bills, and manage investments. Your parents should choose who this person should be, ideally someone they trust. Consult with a lawyer to organize this.
Encourage Them To Write Or Update Their Will
A will indicates how a person’s assets and estate will be distributed upon their death. It also can specify trusts to manage the estate, arrangements for care of pets, funeral and/ or burial arrangements, etc. Creating or updating a will as soon as possible after a diagnosis can be helpful in the future.
Establish A Living Trust
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.
For more details, advice, and tips on providing care for your loved one with dementia, browse our blog.