d DOLLARS & SENSE
Brain Matters
Expert advice regarding managing finances when a loved one faces early cognitive impairment .
BY ANDE FRAZIER
“ Being proactive and having a clear plan in place will help you navigate this difficult time with confidence , ensuring that your loved one is cared for and that their financial future is secure .”
Cognitive decline is a growing healthcare issue that comes with wide-ranging ramifications . One of those is having to care for a spouse , parent , or other family member with early cognitive impairment , a journey that comes with numerous emotional and practical challenges . One of the most pressing concerns is managing their finances . Diseases such as dementia or Alzheimer ’ s can impact their decisionmaking abilities , making it crucial to take proactive steps to protect their financial well-being . Here , we break down some important issues regarding handling money when a loved one is facing early cognitive impairment .
Recognizing the Signs
Before diving into financial management , it ’ s important to recognize the signs of early cognitive impairment . They can be subtle at first but may include the following :
• Difficulty managing finances : Misplacing and forgetting to pay bills or making unusual purchases .
• Confusion with numbers : Trouble calculating simple math or understanding financial statements .
• Memory lapses : Forgetting recent conversations , appointments , or where money was placed .
• Poor judgment : Falling for scams or making uncharacteristically risky financial decisions .
If you notice any of these signs , it ’ s essential to address the issue early on , as quick intervention can help prevent financial mistakes and protect the assets of your loved one .
Initiating the Conversation
Discussing finances with a loved one who ’ s experiencing cognitive decline can be difficult , especially if they ’ re still in the early stages and may not recognize the extent of their impairment . It ’ s important to choose the right time for the conversation , finding a quiet , stress-free moment when the person is relaxed and alert . Approach the topic with empathy and sensitivity , acknowledging that it can be difficult to discuss finances and emphasizing that your intention is to support them rather than to take over their life . Frame the discussion as a partnership , positioning yourself as a collaborator in managing their finances instead of assuming control . Lastly , make sure to listen to their concerns , allowing them the opportunity to express their feelings and anxieties about their financial situation .
Legal Preparations : Establishing Power of Attorney
One of the most critical steps in managing finances for someone with early cognitive impairment is establishing a power of attorney ( POA ), a legal document that grants you , or another trusted individual , the authority to make financial decisions on behalf of your loved one .
There are two types of POA to consider :
• Durable power of attorney : This remains in effect even if the person becomes mentally incapacitated , allowing you to manage their finances continuously .
• Springing power of attorney : This only takes effect if the person becomes incapacitated , which may require a doctor ’ s certification .
It ’ s essential to establish a POA while your loved one is still capable of making informed decisions . Consult an attorney who specializes in elder law to ensure the POA is set up correctly and aligns with your loved one ’ s wishes . Financial institutions are requiring updated power
12 | NW GEORGIA LIVING NOVEMBER / DECEMBER 2024