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Managing a Loved One’s Money

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Updated May 18, 2021

Brenda Stuhr, CPA, CTFA, Vice President, Wealth Management/Learning & Development

Tips for taking over the finances of a loved one battling dementia

As loved ones get older, it’s common for health issues to impact various aspects of their daily lives, creating challenges to their independence and quality of life. Dementia is of particular risk to older adults, with an estimated 5 million U.S. adults age 65 or older living with the condition, according to the Centers for Disease Control and Prevention (CDC). Dementia isn’t a specific disease, but a term for a set of symptoms including impairment to memory, reasoning, judgment, language and other thinking skills, according to the National Institute on Aging.

If you have a loved one experiencing dementia or symptoms of it—such as difficulty handling complex tasks, planning or organizing, or memory loss beyond a simple misplace of the car keys—it might be time to assist with finances. During my over 25 years with Trust Point, I have worked to transition financial oversight for many clients. Though it can be an emotional and difficult process for families, there are steps you can take to make the shift easier for everyone.

Get Involved Early

Nobody wants to talk about the possibility of dementia and its implications on financial management with family. But waiting until a serious health issue occurs will make the situation more challenging and stressful for everyone. I encourage younger generations to thoughtfully begin discussions with their loved ones early. I also urge older clients to introduce their children or the next generation of decision makers to their investment managers while in good health. Parents don’t want to be a burden and certainly don’t want to think about losing their independence. But it is very important to have these conversations so you don’t miss the window when you can appoint somebody that you trust to make the right decisions.

Establish Power of Attorney

Financial power of attorney is a very useful document that allows someone to step in and make financial decisions on another’s behalf when they are no longer able to do so. What many people don’t realize is that a financial power of attorney should be included as part of an estate plan. It’s important not to take that appointment lightly, because with the financial power of attorney, there are many financial transactions that the person you name as attorney-in-fact can transact for you. If you haven’t named a financial power of attorney, you might fall into a place where nobody is able to help you with your finances without going through the court and having a guardian appointed.

Use Empathy

If you find your loved one is having trouble with their finances, be empathetic. It’s important to address the situation, but to do so it is equally important to be patient and kind. Take small steps, keep them involved and try to simplify processes. For example, you might suggest shifting bill pay from paper to online transactions. See things from their point of view, offer to lend a hand, make suggestions that make life easier. Avoid angry conversations or simply telling your loved one what to do.

Consolidate Assets

It’s important to understand the scope of a loved one’s financial assets and consolidate them if possible. This will make things easier from a tax reporting standpoint and simplify overall management. Trust Point has extensive experience in asset consolidation and can help with this.

Update the Will or Trust

If a parent or loved one is having memory issues, it’s critical to make sure that their will or trust is up to date so it’s clear what happens to their assets when they pass. They’ve worked hard for that money and you want to make sure that it is distributed to the people and organizations that they want, and not necessarily based on what state law says. Also be aware that retirement and insurance plans are passed by a beneficiary designation, not necessarily what a will or trust says. When reviewing assets it’s good to include those things to understand the entire financial picture.

know the signs

Protect Against Fraud

Adults with dementia are especially vulnerable to scams, which are most prevalent through phone and email campaigns. Talk with your loved one regularly to make sure they haven’t been involved in any suspicious conversations or transactions.

Leverage the Experts

Taking on financial management for a loved one can mean a lot of things, from organizing routine expenses, such as utilities, to managing investments. It’s important for those helping their loved ones not to take on too much, or feel obligated to manage anything they are uncomfortable handling.

Perhaps you are comfortable with paying bills, maybe setting up weekly meetings with your loved one to go through the mail to keep them involved. Investments, cash flow planning, or getting tax records together, on the other hand, might be out of your wheelhouse.

Don’t be shy about leaning on the professionals at Trust Point, or an attorney or other professional depending on the subject matter, for guidance and advice. Trust Point even offers bill paying services that direct all of a client’s bills to our address.

We look at ourselves as a trusted financial professionals and try to connect our clients with all of the resources that are available to them. We go above and beyond just investment management and look out for the overall care of our clients and their family.

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Brenda Stuhr, CPA, CTFA, Vice President, Wealth Management/Learning & Development