Caring for an elderly family member with dementia can be heartbreaking and difficult in so many ways.
One of the hardest tasks may be protecting them from ruining their finances as their condition deteriorates.
Research shows that those with dementia often show signs of financial trouble years before diagnosis. Left unchecked, their unpaid bills, gratuitous spending or willingness to give money away whenever asked can drain their savings and push them into debt.
Just one unnerving example: CNN Investigates discovered that elderly adults with dementia unwittingly donated millions of dollars over the past five years to political candidates in response to a constant barrage of emotionally charged fundraising requests.
To prevent or spot the kind of situation that can devastate a person’s finances requires that you be both observant and proactive about putting up financial guardrails to minimize your loved one’s temptation to extend themselves.
Aim for cooperation first, not control
Don’t assume that a dementia diagnosis — or any diagnosis that can eventually lead to cognitive impairment — means your loved one is currently incapable of managing their financial affairs or is willing to sign over control of them to you or anyone else.
Aim for cooperation first, not control
Don’t assume that a dementia diagnosis — or any diagnosis that can eventually lead to cognitive impairment — means your loved one is currently incapable of managing their financial affairs or is willing to sign over control of them to you or anyone else.
With or without a formal diagnosis, if you see signs a person is struggling to manage their money — for instance, stacks of unpaid bills and past due notices on your elderly parent’s desk, or bank and credit card statements lying around that show very unusual patterns of withdrawals or spending — bring it up with them. Just don’t be argumentative.
“The conversation should not be accusatory. [As in] ‘You’re not paying your bills!” said Steven Rubin, a certified elder law attorney and partner at Drazen Rubin.
Instead, Rubin suggested, “You might say, ‘Hey, I see a bunch of stuff here and I know you’ve got a lot going on. How can I help you?’ If you accuse them, they may shut down,” he said.
Make a plan that includes financial caregiving
News of a dementia diagnosis is the time to make a plan not only for how your loved one will be cared for medically and physically but also financially before things get any worse.
Both Flynn and Rubin stressed that one of the most important parts of that plan is assigning power of attorney to someone whom your loved one trusts to manage their financial and contractual affairs should they become unable.
It can be a hard sell because people wrongly assume assigning a power of attorney means immediately giving up control of their financial decisions to someone else, Rubin said. But that’s not the case. (More on that below.)
“Most of us deep down are control freaks. But by doing the planning, [let them know they are] staying in control,” he said.
Flynn also notes that if they don’t have a plan in place and there’s a crisis, a court could appoint someone they don’t want to manage their affairs.
