of attorney documents , so be sure to ask your attorney about state-specific wording , including how frequently the document should be updated . And make sure you provide the POA to all of the financial institutions your loved one has an account with so that when the POA designee needs to act , there ’ s no delay .
Simplifying and Organizing Finances
As cognitive impairment progresses , managing complex financial matters becomes increasingly difficult . Streamlining and organizing your loved one ’ s financial affairs can reduce stress and minimize the risk of errors . Here are some steps to take :
• Consolidate accounts : If your loved one has multiple bank accounts , consider consolidating them into a single account to make management easier .
• Set up automatic payments : Arrange for bills and recurring expenses to be paid automatically , reducing the likelihood of missed payments .
• Monitor spending : Keep an eye on your loved one ’ s spending to ensure they ’ re not falling victim to scams or making unnecessary purchases .
• Create a budget : Work with your loved one to develop a budget that covers their essential needs while minimizing the risk of overspending .
• Utilize technology : Consider using financial management apps or services that can help track spending , set up alerts , and manage accounts more efficiently .
Protecting Assets and Preventing Scams
Unfortunately , individuals with cognitive impairment are often targets for financial scams , so taking proactive steps to protect your loved one ’ s assets is crucial . Protective measures include :
• Monitor accounts : Regularly review bank and credit card statements for any unusual activity .
• Limit access to funds : Consider placing limits on withdrawals or spending , or set up alerts for transactions over a certain amount .
• Freeze credit : Place a freeze on your loved one ’ s credit to prevent new accounts from being opened in their name without permission .
• Educate them about scams : Teach your loved one about common scams and advise them to avoid giving out personal information over the phone or online .
• Use trusted contacts : Add a trusted contact to your loved one ’ s accounts who can be notified if suspicious activity is detected .
Planning for Long-Term Care
As cognitive impairment progresses , your loved one may require long-term care , which can be expensive . Planning for these costs early on can prevent financial strain later .
When addressing long-term care options , it ’ s essential to review any existing long-term-care insurance policy your loved one may have to fully understand the coverage and benefits it provides . If they don ’ t have a policy , purchasing coverage might still be an option , although the available choices could be limited based on their current health status .
For those with limited assets , Medicaid may be a viable solution for helping cover long-term-care costs , and consulting with an elder law attorney can be beneficial in navigating its eligibility requirements . Additionally , setting up a trust can be an effective way to protect your loved one ’ s assets , ensuring they ’ re used for their care . A trust can also offer clear instructions on how their money should be managed should they become unable to make decisions on their own .
Involving Other Family Members
Open communication is key when managing a loved one ’ s finances , so it ’ s important to keep everyone informed about the financial situation and the steps being taken to address it . Assigning roles helps divide the responsibilities , with different family members taking on tasks such as monitoring accounts , managing bills , or handling legal matters . When making major financial decisions , aim to seek a consensus within the group to ensure everyone is on the same page . If family dynamics become challenging or if no one feels equipped to handle the financial management , it may be wise to hire a professional fiduciary or financial advisor .
Managing the finances of a spouse , parent , or other loved one with early cognitive impairment requires a balance of empathy , organization , and legal preparation . 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 .
Ande Frazier , CFP ® , CLU , ChFC , RICP , BFA™ , ChSNC , CDFA ® , is an expert in behavioral finance and the author of Fin ( anci ) ally Free : 11 Conversations To Have With Yourself About Life , Money , and Worth . In addition to being a recognized thought leader , author , and speaker , she also serves as a partner at Peachtree Planning Corporation . To learn more , visit andefrazier . com . nwgeorgialiving . com | 13