People in marriages and long-term relationships often share responsibilities, and one person may take on the role of ‘money manager.’ If that person develops dementia and can no longer manage finances, serious problems can arise. Banks and utility companies (e.g., phone, electricity, or water providers) will usually only deal with the account holder, which can make sorting out bills or service issues stressful.
Household accounts
It helps to review household accounts together over the next 12 months and contact each company to learn what’s required so that you or someone you legally appoint can access accounts when needed.
Power of attorney
It’s wise for everyone, not just the person living with dementia, to appoint a trusted person to manage financial and legal matters if we become unable to do so. This is done through a power of attorney. There are two types:
- A general power of attorney. A general power of attorney ends if the person loses mental capacity, so the person nominated at power of attorney eventually will not be able to act on behalf of a person living with dementia.
- An enduring power of attorney continues even if the person has lost mental capacity.
You can appoint a trusted family member or friend over the age of 18 who has a good track record with money management, whom you trust to act in your best interests and who is willing to accept the responsibility. Alternatively, your solicitor or an independent body such as the Public Trustee (available in each state and territory in Australia) can take on this role. You can appoint more than one person, either to act jointly (all must sign) or severally (any one person can sign). More information about powers of attorney in each Australian state or territory are available at Compass
Protecting against financial abuse
People living with dementia, regardless of age, can be vulnerable to financial abuse because they may need help with banking or major financial decisions. Make sure that no one– businesses, salespeople, friends, or family–pressures or influences financial choices. Comprehensive information about recognising, preventing or responding to financial abuse is available through Compass.
Wills
A will gives instructions for how the estate of a deceased person should be distributed. A will is only legal if the person signing it understands the implications of the will. It is important that the person living with dementia has ‘capacity’ to sign a will. Capacity is a legal term that refers to a person’s ability to demonstrate that they understand the implications of the document they are signing.
Dementia will eventually affect decision making ability and, therefore, a person’s capacity to sign a will. For this reason, it is important to make, or update your will as early as possible after diagnosis. This is particularly relevant in young-onset dementia, where there may be dependent children, shared mortgages, or complex financial arrangements.
A will requires careful thought and consideration. Wills can be prepared by a solicitor or a ‘do-it-yourself’ kit from a newsagent or online. However, be aware that if a ‘do-it-yourself’ will is made and later challenged, it is harder to justify that the person with dementia had capacity when making the will. A solicitor formally assesses capacity and records that the person making the will had capacity at the time.
A will requires careful thought. For example, you may wish to set up a trust to manage funds for children or for the ongoing care of the person with dementia. You might also name alternate executors and guardians to provide back-up if your first choice is unavailable.
For more information about making or updating a will, visit the Law Society of NSW or the Australian Seniors website or speak with a solicitor or the Public Trustee in your state or territory.
Note that superannuation is not automatically included in a will. You must make a Binding Death Benefit nomination with your super fund. Seek advice from your superannuation fund directly to ensure your superannuation is distributed according to your wishes.
Plan your financial and legal affairs
- Arrange access to household accounts as needed
- Discuss arranging enduring power(s) of attorney and preparing or updating wills
- If you have superannuation, ensure you have a Binding Death Benefit nomination
Photo: Melissa Walker Horn via Unsplash.
