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Managing Finances for a Parent With Dementia
Written by OurParents Staff
about the author
7 minute readLast updated February 26, 2024
Warning signs that your loved one can’t make sound financial decisions can vary. From piles of unopened or unpaid bills to making impulsive and lavish purchases, there’s a lot to be on the lookout for. If you begin noticing these things, it’s important to speak to your parent about their financial situation as soon as possible and make sure you have all the documents you may need to begin managing their finances effectively.
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Recognizing financial management challenges in your senior loved one
One of the first early warning signs of dementia and cognitive decline is losing the ability to manage money and ending up in serious financial trouble. This can lead to many challenges for you and your loved one, which is why advance planning is necessary. Parents often have difficulty admitting that they need help, and no one wants to lose their independence. However, daily tasks and money management can sometimes be too much to handle as your loved ones age, and it’s important to step up and address the problem when this happens — even if it is painful. Remember: Financial issues will not go away on their own and usually need to be addressed quickly.
Warning signs a parent with dementia needs help managing their finances
Some of the most common signs that it’s time to help your parent manage their finances include unopened mail and bills piling up. Additionally, if your loved one is avoiding phone calls from collection agencies or credit card companies about missed payments, it’s a clear indicator of needing assistance. Here are a few other telltale signs that they may need assistance managing their finances:
- Complaints that they suddenly don’t have enough money
- Necessary home repairs aren’t getting done
- Sudden expensive purchases that don’t seem to fit your parent’s normal spending habits
- Falling victim to elder fraud or financial scams
- A mental and/or physical inability to keep up with daily living tasks
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Tips for managing finances for a parent with dementia
Having a discussion with your aging parents may be necessary to get their finances back on track. Even if they have properly prepared for their retirement, it’s important to reevaluate and get their affairs in order if there are signs that they can no longer handle money management. The following tips can help you prepare for this conversation and help it go as smoothly as possible. Keep all of this information in a secure location that’s easily accessible, like a safe or safety deposit box. Make sure a few trusted family members have access to the information so everyone can stay organized when decisions have to be made quickly. Basic legal documents your parent should have include:
1. Get organized
You’ll likely need to gather a lot of information and get it organized before anything else can begin. Here’s a general list of important documents and other information you’ll need about your parent:- Bank account information
- Estate planning documents
- Insurance policies
- Marriage license
- Passwords and usernames
- Personal financial statements to account for assets, debts, and spending habits
- Proof of ownership documents (such as registrations, titles, deeds, and liens)
- Retirement accounts information
2. Prepare legal documents
Getting legal documents in order when your loved one is still mentally and physically able will help them document their wishes while protecting their assets and estate. Without your loved one’s guidance, you and your family may experience disagreements over finances and care decisions. You might even need to go through the process of seeking guardianship of your parent. Prepared correctly, these documents can help you and your family provide the best care possible to your loved one, especially as dementia progresses.- Durable power of attorney for health care
- Durable power of attorney for finances
- Living will
- Last will
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3. Review documents and information regularly
Generally, legal documents should be reviewed annually or after major life events. Family visits are a great time to review your senior loved one’s medical, legal, and financial plans. Personal preferences may change over the years, so it’s important to keep them updated. If any changes are needed, your parent may need to consult with their financial advisor or attorney to make them.4. Perform regular financial health checkups
Financial scams targeting seniors have become popular with cybercriminals. Scammers target older adults because they’re likely to have accumulated wealth from their investment portfolios, retirement planning, and years spent in the workforce. Performing a financial health checkup can help protect your parent with dementia from various types of fraud.5. Consult a professional advisor or fiduciary
You may find it useful to tap into the expertise of a professional financial advisor or fiduciary. An unbiased third party who is an expert in finance can help answer questions, get affairs in order, and plan for a successful future while protecting your loved ones’ assets.Recommended For You
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