Dementia Care Finances: Tips & Tricks
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At some point after a dementia diagnosis, your parent will no longer have the capacity to pay bills or manage their finances. You may wonder how to help your parent continue to cover their expenses for rent, utilities, doctor appointments and more. The best way to plan for this is having your parent set up a power of attorney as soon as they’re diagnosed with dementia.“With a durable power of attorney, you give that person the legal ability to do pretty much anything financially that you would be able to do,” says Muriel Tinkler, an elder law attorney with Tinkler Law in Baltimore. “[However], if you don’t want your power of attorney to do things right now, like pay your bills and handle your finances, then you do something called a springing power of attorney, where it would take place under certain circumstances, [including] cognitive impairment.”Getting help from professionals
Getting help from professionals
Some people prefer to take over their parent’s finances without help from professionals. You can look online for your state’s power of attorney form. If your parent’s financial situation is straightforward, you should be able to fill out the form yourself. If you have questions or there are special circumstances, you and your parent should meet with an elder law attorney, who can recommend options.“Attorneys may customize the form one way or the other,” Tinkler says. “[If] you want someone to have the ability to do everything – except for anything related to estate planning – or you want them to do everything except for real estate transactions – because there’s a real estate agent you like to work with – that would be a limited power of attorney.”You and your parent may also benefit from seeing a financial advisor.“Some people are thinking, ‘Oh, that’s for really rich people,’ but it doesn’t necessarily have to be,” Tinkler says. “The financial advisor that most elder law attorneys work with is Krause Financial Services – all they do is elder law. We work with them, and it doesn’t cost the client anything. It really doesn’t hurt for them to review your documents and see what you qualify for, how they can save you money.”A financial advisor or elder law attorney may provide a checklist, similar to one from the Alzheimer’s Association, to help you help your parent identify all of their accounts.“Find out as much about your parent’s assets as soon as possible,” Tinkler says. “Communicate with them. Watch out for any mailings or online information, because there could be things out there from years ago that you’re not that familiar with.”
How to pay your loved one's bills
When you eventually become power of attorney for your parent, you should be able to pay bills on their behalf, using their funds. You may or may not need to have your name added to your parent’s accounts to do this, depending on your state and your parent’s financial institution.
“If you are a power of attorney, then sometimes you can contact the bank [to pay bills for a parent without having your name on the bank account],” Tinkler says. “[But] the easiest way would be to add the name to the bank account.”Some people are hesitant to add their names to a parent’s bank account, in case that would keep the parent from qualifying for Medicaid. While rules may vary by state, your parent shouldn’t be penalized for simply adding you to their account.“I have not experienced the case where a child adds their name to an account and then Medicaid would then look at the child’s assets,” Tinkler says.However, if you contribute your own funds to your parent’s account – especially cash that can’t be accounted for – that may affect their ability to qualify for Medicaid. To protect your parent’s potential Medicaid eligibility, keep your money separate.
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