Managing money and finances for someone with dementia is fraught with complex emotional and legal issues. Needless to say, the sooner you put plans in place, the better for all concerned.
Issues with money may be one of the first signs that someone is suffering from dementia. There may be large amounts missing from accounts, sufferers may have a limited awareness of the value of money or, often, you may find stashes of cash around their home.
If you notice the signs of dementia in a parent, loved one or someone for whom you care, you should act fast to ensure the correct procedures are in place for a person who can no longer make competent decisions for themselves. Here are some issues to consider.
Where will they live?
Many dementia sufferers are able to remain in their own homes with assistance for many years, but a time will likely come when they will need to move to a special facility that can offer a high level of care. Although it can be upsetting for all concerned, you should have this discussion with the affected person while they are able to have a say in how they wish to be cared for, where they wish to be and how this will be funded and managed.
Making financial decisions
Bank accounts held in joint names can, for a period of time, be managed by the other person, without any necessary changes. However, problems can occur if the person with dementia is the only named person, or starts to use such accounts inappropriately.
Banks are well versed in dealing with such issues and you should consult the branch manager about what processes, such as limiting the amount of money the person can withdraw or adding another signatory to the account, can be put in place.
More complex financial decisions, such as the sale of property or investments, will require detailed planning and legal documents to support such arrangements.
Once a person is no longer financially competent, having any legal agreement drawn up and signed is near impossible, so you should arrange for this to be done earlier on, before their mental capacity significantly declines. The most common means is by putting in place an Enduring Power of Attorney, which can be drafted and notorised by a qualified legal practitioner.
What is an Enduring Power of Attorney?
Available in most states and territories, an Enduring Power of Attorney gives authority to a chosen person to act on your behalf once you have lost competency to do so for yourself.
You can often have one that covers financial decisions and one that covers medical decisions to be made on your behalf. Each state and territory has different benchmarks and guidelines for what is covered under such a document, so it is important that you seek legal advice before signing or when you move interstate.
For the record, a general Power of Attorney is only available when the person is legally competent and ceases to be of any use once this is no longer the case.
Making a will
Sadly, there will come a time when the dementia sufferer dies and to ensure there are no legal hiccups, a will should be lodged. As with any legal document, a will is only valid if the person signing it fully understands what they are doing. If any update is required, a medical certificate from a doctor may be required to provide evidence that the person is mentally competent.
What happens when no provisions have been made?
If a person’s condition deteriorates rapidly, or no legal provision to manage financial affairs has been put in place, then most states have a guardianship board or tribunal that will appoint a guardian or administrator on the person’s behalf.
Obviously, this process can take some time and may not be satisfactory, as it rarely takes into consideration the sufferer’s wishes.
Support at this time is paramount, not only for the person suffering from the condition but also for their loved ones and carers. For more information on how to implement practical legal and financial arrangements for a dementia sufferer, you should contact Alzheimer’s Australia.