June is Alzheimer’s & Brain Awareness Month, a time to raise awareness about Alzheimer’s disease and the impact it can have on individuals and their families. As Alzheimer’s progresses, managing finances can become increasingly challenging—in fact, some of the earliest warning signs of dementia include money mismanagement. Recognizing these signs—and taking proactive steps to protect your loved one’s financial security in the future—is crucial.
Recognizing the Signs of Alzheimer’s or Dementia
According to the National Institute on Aging (NIA), problems with money management often begin to arise in the early stages dementia. If you notice any of these five warning signs, it may be time to start preparing for a cognitive decline.
- Difficulty keeping track of bills and due dates
- Unusual or unexplained purchases
- Confusion or anxiety when managing financial matters
- Increased vulnerability to scams and fraud
- Decline in financial judgment and decision-making
What Protective Measures Should You Take?
To protect the financial well-being of a loved one with Alzheimer’s, it’s essential to take proactive steps as soon as you notice the signs of financial disarray.
- Set up automated bill pay: Automating bill payments can help ensure that essential expenses are paid promptly, thereby reducing the risk that important services could be suspended. This can provide peace of mind, and help maintain your loved one’s financial stability.
- Consolidate and simplify accounts: Consider consolidating accounts to simplify management and reduce the risk of mishandling funds.
- Monitor financial activities: Keep a close eye on your loved one’s financial transactions and statements. Regularly review bank statements, credit card bills, and investment account activity to detect any signs of irregularities or unauthorized charges. Consider using financial monitoring services that can provide alerts for unusual account activity or changes in spending patterns. These services can help you stay vigilant and intervene if necessary.
- Protect against scams or fraud: Individuals with Alzheimer’s can become more susceptible to scams and financial exploitation. Educate yourself and your loved one about common scams and fraud tactics. Encourage them to be cautious with their personal information and avoid sharing it with unknown individuals or organizations.
Safeguards for the Future
Before your loved one’s cognition declines to the point of impairing their decision-making abilities, it is imperative to establish safeguards for their (and your) future. Here are some suggestions:
- Consider adding a money manager to their bank accounts: Hiring a professional to manage your loved one’s finances can ensure that bills are paid on time, deposits and withdrawals are made, and their account balances are monitored. While still of sound mind, your loved one can add anyone they choose as a money manager on their accounts, but many choose to hire a professional—like Santa Barbara Fiduciary—to eliminate the possibility of stirring up drama with their family. Additionally, professional fiduciaries will ensure that money is managed responsibly—and, in fact, the law provides protections if a professional fiduciary fails to act in the best interest of their client.
- Name a Power of Attorney (POA) Agent: A durable power of attorney grants a trusted third party with the legal authority to make financial decisions on behalf of your loved one. Your loved one would need to draft this legal document—and name their POA agent—while of sound mental health. Oftentimes, people choose to name a professional fiduciary as their POA agent, but this person can also be a trusted professional, sibling, child, or friend.
- Draft a Living Trust and Name a Trustee: Once again, this is something that should be done well in advance of your loved one begins showing signs of dementia. After a revocable living trust is drafted and funded—and a Trustee is named—your loved one can rest assured, knowing that their assets will be protected and properly managed by the Trustee in the event they become incapacitated. A trustee can be a friend or family member, but a professional fiduciary is often the best fit for this role, as well.
As Alzheimer’s disease progresses, the ability to manage finances independently becomes increasingly challenging. By recognizing the signs of money problems and implementing protective measures, you can help safeguard the financial security of your aging loved ones. Seeking the assistance of a professional fiduciary can provide the necessary expertise to navigate the complexities of managing someone else’s finances. By acting proactively and thoughtfully, you can alleviate financial stress and ensure your loved one’s financial well-being throughout their Alzheimer’s journey.
At Santa Barbara Fiduciary, we have many years of experience looking after the finances of elderly individuals and acting as agents for clients of all ages. Call us at 805-308-6842 and get started protecting your loved ones today.
Contact Santa Barbara Fiduciary
Santa Barbara Fiduciary can help you and your family navigate successor fiduciary appointment decisions, and ensure the diligent implementation of your or your loved one’s estate plan. Contact us today to learn more about our services, and how we can help you and your loved ones navigate life transitions.
