In this article, we’ll discuss steps to take and top tips on managing elderly relatives’ finances if they’re suffering from dementia…
Managing Your Elderly Relatives Finances When They Have Dementia
Difficulty handling financial tasks is one of the first signs of dementia. Sadly, the day will come when your elderly relatives are no longer able to make informed choices over their finances.
Having a power of attorney (POA) can make things easier for you and your relative as dementia advances. Although, these discussions can be tough and emotional for everyone involved.
In order to arrange a POA, the donor must have the mental capacity at the time to consent to the document. That’s why it’s really important to have these conversations as soon as possible.
Powers of attorney solicitors can help you get affairs in order and provide plenty of advice if you become lost with knowing what to do. Here are some tips on managing an elderly relative’s finances when they have dementia….
What Are the Different Types of Power of Attorney?
In the UK, there are three different types of powers of attorney:
Ordinary power of attorney
This is a temporary document, giving the attorney the right to make decisions over finances only. It can be used for a donor that has a mental capacity or is abroad for a long time.
Enduring power of attorney
This document gives the attorney the right to make decisions over finances only. You can no longer make one as they brought in LPAs in 2007 to replace this document however existing enduring power of attorney can still be used.
Lasting power of attorney
There are two different types of this document, property and financial affairs lasting power of attorney (LPA) and a health and welfare LPA. You can choose to do both or just one. The donor can pick the same or different attorneys.
All LPAs must be registered at the Office of the Public Guardian (OPG).
Tips to Start Managing Your Relative’s Finances
Start Conversations Early
Having a power of attorney in place early will offer peace of mind for the caregivers. Despite this, it may still be some time before your relative actually starts needing help but it’s important to start talking now.
It is normal to feel reluctant to do so, however, the conversation can reduce miscommunication and in general will make the process a lot easier. Afterwards, you may seek wealth management planning services to help with your relative’s finances.
Remind yourself that this is a very sensitive topic and emotions will be heightened so be gentle and respectful when communicating. Most importantly allow your relative to be a big part of the decision-making process so to ensure you understand what they want from this.
Questions to Ask:
- Have they named an LPA?
- Where do they keep their financial and medical records?
- What is their bank account numbers and names of financial institutions?
- What is the name of their GP and medical institutions, what medications do they take?
- What are their monthly expenses?
- How do they pay their bills? For instance, do they have a direct debit set up or a standing order?
- What is their annual income and where does it come from?
- Do they receive pension?
- Do they receive benefits?
- Do they have insurances and if so, which ones?
Organise Important Documents, Bills and Make Accessible
Find the time to ask for your relative’s financial, legal and medical documents and file them. We recommend setting up standing orders for regular bills, so they’re paid on time and storing important files and records online so they’re easily accessible.
What If Your Relative Doesn’t Want Help?
It’s hard for any relative senior to you to acknowledge they need help as they’ve been your care provider since you were born. So, it’s understandable that they may be in denial or feel guilty about the roles reversing.
Because of this, it is important to adopt a gentle and mindful approach when discussing the topic. Remember to be a good listener and make it clear that you have their best interests at heart which hopefully in turn, will combat any anxiety they may have.
Additionally, you could get a third party involved as your relative may respond better to someone who is not directly involved in family affairs and has an objective point of view.
Alternatives to a Lasting Power of Attorney
If your relative doesn’t make an LPA and later becomes unable to make decisions for themself, you will not legally be able to make decisions for them.
This can make things far more complicated and stressful as you won’t be able to pay your relative’s finances or make decisions about their care.
However, you can apply to the Court of Protection to become a deputy which can grant similar powers as an LPA although it is far more time-consuming and expensive.
Another option you can consider is getting your relative to make you a third-party mandate on their bank account and they can specify exactly how much access they want to give you.
Don’t Neglect Your Own Needs…
When you’re caring for a loved one it can be easy to forget about yourself. Therefore, it is important to set aside time to make sure your needs are also being met. In the long run, this will make it easier for you to cope and you will feel more able to fulfil your duty of care.
It is important to remember at times like this you’re not alone. Caring for someone with dementia can be very demanding at times and with this can come a whirlwind of emotion and feelings of anger, confusion and guilt.
Providing care for someone with dementia can also be very isolating at times which is why you shouldn’t be scared to ask for help. There are also many care groups out there such as Alzheimer’s UK, Age UK and Dementia UK which offer a lot of support and reliable information.
Please be advised that this article is for general informational purposes only and should not be used as a substitute for advice from a trained legal professional. Be sure to consult a lawyer/solicitor if you’re seeking advice on the law. We are not liable for risks or issues associated with using or acting upon the information on this site.
Last Updated on June 30, 2023 by Lucy Clarke