Once your capacity reduces, managing day-to-day money can become difficult. You might forget to pay bills, or lose track of bank accounts.
Being too trusting could lead to unauthorised use of bank cards, or pressure to “help out” financially, or just scams. The list goes on.
In my own small circle, I’ve seen people hard-sold expensive products they can’t afford and/or don’t need, and fall for scams and situations where relatives helped themselves to the person’s money and belongings.
In the real world, it’s impossible to completely dementia-proof your finances. Sometimes, trusted relatives prove not so trustworthy when they have the temptation of access to your money. But the goal is to plan as best you can while you can still make decisions.
The most important step is making sure you have an enduring power of attorney (EPOA) for property in place early. An EPOA allows someone trusted to act on your behalf and can include limits and conditions.
“An EPOA is like preparing for a fire,” Darral Campbell, chief executive of Dementia Canterbury, said. “You don’t wait until you have a fire to have a fire extinguisher or an exit plan.”
You must set the EPOA up while you still have mental capacity and can either choose to activate it it immediately, or it can be activated after a medical assessment if you lack capacity, Campbell added.
Other steps you can do to prepare are:
- Make sure you have a will. You don’t want to have someone encouraging you to write a will (in their favour) when you do not have full capacity. This happens.
- Keep at least one independent person aware of major financial changes and talk to them. My mother used to do this with me, which saved her from nefarious ventilation salespeople and some not-so-sensible investment “opportunities”.
- Simplify banking, by having fewer accounts. Avoid keeping large sums of money that can be accessed by anyone you give your Eftpos card and Pin to. Banks’ terms and conditions don’t allow you to do that. But it happens.
- Use direct debits and automatic payments for regular bills.
- Set transaction limits and SMS/email/push alerts on accounts. These alerts will notify the account holder if large transactions occur. It might be possible to have the alerts sent to both the person and a trusted family member. Or set an auto forward in email.
- Avoid joint accounts with adult children or others without taking legal advice. It gives the co-holder full access to spend or withdraw without consent.
- Prepare yourself mentally to be cautious with door-to-door and phone offers. Even from “reputable” companies.
None of this is perfect. The majority of relatives, carers, financial professionals and salespeople act honourably. But they can go rogue when money is involved. Scammers are unbelievably clever at getting around the best-laid plans. I know from personal experience that banks are a nightmare to deal with, even with an EPOA.
Dementia may affect any of us, but taking practical steps now can protect your finances, your independence, and your peace of mind. Planning means making choices on your own terms and easing the burden on your family in the future.
Dementia Canterbury has some exceedingly useful advice on its website, which can be found at tinyurl.com/Dementiacanterbury.org.nz/services-support/education-resources/education-videos.
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