01 Feb Mom has dementia. How do I manage her finances?

Q. My mother is starting to get dementia. I’m trying to get a handle on her finances while she can still help with that. What stuff should I get in order?
— Stressed

A. We’re sorry to hear about your mom.

Caring for a parent with dementia can be stressful and requires the caretaker to be supportive and have patience.

Start by having a discussion with your parent so that they understand that you are trying to help and not take over, said Jim McCarthy, a certified financial planner with Directional Wealth Management in Rockaway.

Once the parent feels comfortable, you can get their finances organized and prepare legal documents, he said.

“The first step is the legal documents to get in order while your parent can still make their own decisions,” McCarthy said. “If these documents are not in place and your parent becomes incompetent, you will have to go through legal courts and might accumulate significant costs.”

McCarthy said legal documents include a durable power of attorney for finances to allow you to legally manage and make decisions on their assets. A durable power of attorney for health care as well as a living will are also recommended, he said.

“Having these documents in place will make it easier to make difficult decisions if they arise regarding the care for your parent,” he said. “Both of these documents are operative while your mom is alive.”

She should also have a will, he said, noting that it would lay out what happens when she passes away.

You should consult an estate planning attorney to get these documents created or updated if they are outdated, he said.

You will need to gather as much information as possible, including bank accounts, estate documents, insurance policies, investment accounts, retirement accounts, usernames and passwords, any liabilities, and the title and registration for assets such as real estate and vehicles.

“Going through this exercise will allow you to have a clear picture of what assets you will need to manage,” he said. “Other important financial information you can gather is your parent’s spending habits such as income inflows and expense outflows as you wouldn’t want any recurring bill/expense not to be paid on time.”

Once you gather this information, it will be important to keep it in a secure and easily accessible location, such as a safety deposit box, McCarthy said.

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This story was originally published on Feb. 1, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.