There are over 400,000 Australians currently living with dementia and that figure is expected to increase to over half a million by 2025. Another 26,000 are living with younger onset dementia – a figure that is also predicted to rise over time.
While there are obvious costs to society of care and disability support, an often less talked about effect is the possible financial ramifications for both the dementia patient and their family.
Anyone caring for an elderly parent with dementia will no doubt be aware their parent is of a generation that is often secretive and guarded when it comes to matters of their own finances. This mindset doesn’t help matters.
We often share tips with our readers about planning for the future – no matter WHAT your current age. But as we age, having plans in place will not only help ensure our wishes are followed it will also relieve some of the stress on the loved ones left to make financial decisions for us.
How can your money be affected by dementia?
Initially it may be that everyday tasks become more challenging and confusing such as keeping track of spending, doing the banking, checking bank statements or paying bills.
As dementia progresses the patient may become incapable of managing their financial affairs or develop paranoia and suspicion around offers of assistance. Without prior planning or a caring support system those affected could also be more vulnerable to financial abuse by people who may try to take advantage of their situation.
Putting plans in place to protect your money should the worst happen involves two key areas – simplifying your finances and deciding who will manage your finances.
Simplifying your finances
It will be easier for both you and your loved ones to stay in control of your finances if you simplify them in several areas. Some useful tips are:
- Consolidate multiple transaction accounts into one account.
- Reduce the number of your credit and store cards.
- Do you really need that cheque account? If not, close it.
- Make a list of regular bills and how often they recur, eg phone (monthly), electricity (quarterly), rates (annually). Better still, consider setting up direct debits for regular bills.
- As you pay each bill, mark it as paid and file it away.
Who will manage your finances?
An enduring power of attorney allows you to choose who will manage your affairs if there comes a time when you are unable to do so yourself – you should speak to your solicitor to arrange this. You can appoint one or two people but most importantly they should understand their responsibilities and legal obligations and YOU should feel confident they will act in your best interests. Without this in place a court may need to appoint a person to take care of you.
Sort out important documents!
Take the time to collate all of your important documents, including:
- birth certificate
- marriage certificate
- will (ensure it is up to date)
- enduring power of attorney or guardian details
- tax file number
- personal insurance policies
- Centrelink reference numbers
- account passwords, including social media accounts
- property deeds
- insurance details
- bank account details
- list of direct debits
- mortgage documents
- superannuation details
- investment documents
- other loan details
- funeral investments or loans
- Medicare number
- medical insurance details
- pensioner concession card
What if you DON’T plan?
With no plan in place and a lack of knowledge of our financial situation, families often struggle to sort through our finances – at an already difficult time. Nobody ever WANTS to leave their family in that situation.
None of us knows what life will throw at us and when, but life’s curve balls COULD be easier to manage if we have taken steps to protect ourselves AND our money.
Are you part of the ‘sandwich generation’ worried about the finances of aging parents? Check out our article ‘Aging Parents: How will I support them financially?‘
Disclaimer: This article is generic in nature. All finance and investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice.