Let's imagine that you have an aging loved one who has cognitive impairment. You are aware that your loved one is "slipping." You tell yourself it's OK. You do nothing more than try to pay closer attention. You may ignore the fact that if your loved one has dementia, it's not going to get better. You ignore the reality that if a person develops dementia, he or she is not going to be able to manage money for very long and that alternatives must be in place. Then something happens that brings you to a crisis.
It may be loss of money to a scammer. It could be huge mistakes in careless spending. It could be that bills aren't paid and the utilities are cut off. Whatever the event, it brings you and your family to the boiling point. Some are angry. Others may still be in denial. A family fight breaks out. Siblings accuse each other of wrongdoing. The elder accuses you of plotting against him. It's a nightmare.
If there is one recurring theme we see in working with families who have aging parent issues, it's conflict about finances.
Whether siblings are arguing with each other over how to pay for a parent's care, or it's about Dad mishandling the checkbook after being diagnosed with dementia, it's a source of enormous distress. Part of the problem is that when an aging parent's mental capacity begins to decline, it is subtle, uneven, and can be hidden for a time. Most families are in denial about cognitive impairment. It's just too painful for so many to accept and take in.
Adding to the stress of a parent's cognitive impairment is the consequence of denial: Money issues arise and no one is prepared to deal with them.
Here are some suggestions for avoiding those nightmare fights over money that can be prevented by planning ahead.
If you have a loved one with cognitive impairment, whether officially diagnosed as dementia or not, be sure you have the critical legal documents you need properly prepared and signed. You need a durable power of attorney for finances and an advance healthcare directive. Do not wait. Eventually, your loved one may be unable to sign any legal document. Lack of signed legal documents can force you into court for a guardianship (conservatorship in California) and cost time and money you don't need to spend.
Educate yourself. You need to know what assets your aging parent has, what debts exist, and whether any arrangements, such as long-term care insurance, are available to help with the cost of care. You need to know what income your parent receives and how that income is being spent. If you or your family members are able to contribute to the cost of caring for an aging loved one, including providing some care yourselves, be sure you write down the agreements as to who will do what. Strive for equity. Most of us can do something to help, even from a distance.
Seek advice from a qualified financial advisor to use any assets you have in the best way possible to care for your loved one. He or she may seem fine now, and able to manage independently. With cognitive impairment, this independence will not last. It is typically, with any form of dementia, a progressive and deteriorating condition. Not everyone is ready to handle the behavior changes, the need for constant supervision, and the need for helping with activities of daily living that dementia causes. It costs a lot to hire help and give family relief from the often burdensome responsibilities of long-term dementia care.
Have a family meeting to discuss the need for care and the sharing of responsibilities. Someone needs to take leadership and develop an agenda for topics that should be discussed. Identify them and be sure everyone has the same information well before the meeting. Everyone should be allowed the chance to speak and give his or her views. If there is no one in your family who is good at leading a discussion, get outside help from an experienced mediator, care manager, or social worker. The cost of help is well worth it in guiding your family to good decision making.
Include your aging loved one, even with cognitive impairment, in the planning process as much as possible. This does not mean that you allow an impaired person whose judgment is not intact to make all the decisions. Ask your loved one for his or her preferences. Respect your parent's values as much as possible. And use your own good judgment to keep your elder safe. He may not be able to see or understand his own cognitive problems and may think he is fine to manage money, drive, live alone, etc. If he can't see the problem, step in and assume the necessary role of parenting your parent.
No one needs to experience the heartache of family fights over aging parent finances. With smart planning, you and your family can weather the storm of a parent's cognitive decline with dignity. And you can know that you've done everything possible to make this part of your aging parent's life the best it can be.