Dementia and the Future of your Parent's Finances

If your parent’s cognitive abilities have diminished as they have aged, you may want to look into the situation. In some cases, parents who contract dementia will fail to tend to household finances, and instead accumulate exorbitant amounts of debt. In Time Magazine, one reporter explained a situation where two elderly parents had been living on their own. The children, all grown adults, did not know that their father had dementia until they realized that the household finances were in total disarray. In this situation, the elderly man failed to pay bills, invested in companies that were not successful, and made random, large donations to charities that he had never supported before.

The children took up the responsibility to right the financial disaster, but it cost them much of their future inheritance to do so. A report by the Alzheimer’s Association declares that 1 in every 8 older Americans currently suffer from a form of dementia. More than 15 million Americans say that they provide some level of care to a person with this mentally degenerative disease. When a person with dementia is not aided with his or her financial obligations, it may end up costing future heirs their entire inheritance. Thankfully, with some planning, you can help your elderly parents stay on top of the costs of living so that their wishes for their financial legacy will be respected.

If your parents are suffering from dementia, then you need to talk to them about their finances right now. Even though this can be a touchy subject, you should still bring it up. Ease into the topic of money by starting a conversation about a current economic issue or a friend’s financial position. Then sweetly ask your parents if they have made arrangements for their long-term care in the future or if they have enough retirement income. You can also offer to assist in managing their finances. If your parents are open to your assistance, then you can establish automatic bill payments so that your parents won’t have to remember to pay certain obligations.

You can even arrange for any social security checks, pension checks, and other incomes to be deposited into one account. Then, have all bills paid electronically and automatically on their due date through this account. This will help Mom and Dad from ending up without utilities or being hampered by creditors because they forgot about an important payment. You may want to help your parents set up their legal documents so that in the event that they are incapacitated, you can take control of their finances and pay their bills. You will want to ask your parents to get a durable powers of attorney document for this purpose. Also encourage aging parents to update their will so that it reflects their desires and to make sure that deeds and property titles are current.

While your parents may not want you to have access to their bank accounts and other important accounts right now, make sure that the information is available for the future. If you can’t access certain accounts then these things may end up dying along with your parents when they are no longer around. Try to compile bank lockbox keys, passwords, login information, and account numbers for investments. Put this information in a file that is accessible for your parent’s attorney, banker, and financial advisor. Stay in close contact with your parents, even if you don’t live near each other. This is essential because staying close together will help you to note whenever your parents seem to be suffering from absent-mindedness or memory loss. If your parents start to show signs of dementia, you will want to be nearby to help with the many different aspects of their life where they may need aid.