When a parent begins to show signs of dementia, it can feel emotionally and practically overwhelming. Among the most pressing concerns is how to ensure their finances are managed responsibly and in their best interests as their capacity declines.
From recognising the earliest warning signs to setting up legal safeguards and planning long-term care, here are some key steps adult children can take to protect their parents’ financial well-being.
Recognising the Early Warning Signs
Before financial decision-making becomes a serious concern, it’s vital to notice subtle changes in your parents’ habits. Early signs of difficulty may include repeatedly missing bill payments, confusion about everyday baking tasks, unexplained withdrawals or unusual purchases, and difficulty following financial conversations.
The signs may seem minor at first, but they can escalate quickly. By gently raising the issue early, you allow your parent to participate in planning while they still have capacity.
The Critical Role of Lasting Power of Attorney (LPA)
A Lasting Power of Attorney (LPA) is usually the most critical legal safeguard you can put in place. An LPA enables your parent (the “donor”) to designate one or more trusted individuals (the “attorneys”) to determine choices on their behalf if they lose capacity.
There are two types of LPA in the UK. The Property and Financial Affairs LPA enables you as the attorney to manage bank accounts, pay bills, and make financial decisions. Health and Welfare LPA cover personal healthcare, medical treatment, and care arrangements. You should establish these while your parents can still legally consent.
Navigating the complexities of drafting and registering an LPA can be challenging. The expertise of dedicated mental capacity and vulnerable persons lawyers can be invaluable, ensuring the document is legally solid and tailored to your family’s needs.
Managing Day-to-Day Finances Safely
Once legal authority is secured, your focus will shift to practical, everyday management. Direct debits and standing orders can be invaluable for ensuring household bills are consistently paid on time. Also, try to consolidate accounts where appropriate to reduce the complexity of finances for yourself and your parent.
On their online banking apps, you can adjust the settings to allow you to monitor activity without risking misuse. Keep their financial records organised, such as insurance documents, pension details, and utility statements. Enacting practical systems will safeguard your parents’ financial stability and give them peace of mind.
Protecting Against Financial Abuse and Scams
People living with dementia are particularly vulnerable to financial exploitation. They are regularly targeted by cold callers offering bogus services, unsolicited letters claiming prize wins or fake investments, and phishing scams requesting banking details or passwords.
You can reduce risks by registering your parents’ phone number with the Telephone Preference Service and placing a No Cold Calling sticker on their door. Monitoring for unusual activity is also essential to alert you to potential problems before they get out of hand.
David Prior
David Prior is the editor of Today News, responsible for the overall editorial strategy. He is an NCTJ-qualified journalist with over 20 years’ experience, and is also editor of the award-winning hyperlocal news title Altrincham Today. His LinkedIn profile is here.
