Safeguarding and Supporting Loved Ones in Mental Decline
Declining mental capacity among aging loved ones can be an overwhelming challenge for family members, posing a myriad of emotional, medical, planning and caregiving issues. Those suffering from decline may be unaware of their condition and thus resistant to assistance, even as dementia makes it difficult to handle routine financial and health care decisions.
Where possible, we believe it is important to take proactive steps to protect them from a health care and financial perspective, whether from poor decision-making or from those who may seek to take advantage of them.
HERE ARE A FEW HIGH-LEVEL IDEAS TO CONSIDER:
1. Watch for Warning Signs
Cognitive decline among the elderly can reveal itself a little at a time, from interactions to personal habits. When it comes to financial matters, research has shown that decision-making can begin to deteriorate years before a formal diagnosis of Dementia.
2. Set Up a Framework for Assistance
Signs of decline may introduce a whole set of tasks and decisions, from consulting with medical professionals to considering forms of care and assistance. Addressing mental capacity with loved ones can be uncomfortable, but incorporating mental and cognitive health into annual checkups can help normalise the topic and introduce opportunities for more targeted expert assessments as needed.
3. Introduce Safeguards
Clearly, friends and relatives should tread carefully when stepping into the lives of those suffering from decline. That said, two early financial steps can offer benefits while potentially avoiding issues of intrusion into the autonomy of the person affected:
Establish Automated Bill Payment
Plenty of people use automated bill payment these days for purposes of convenience and security. You can help arrange for the automatic payment of most regular expenses, including utilities, mortgage and rent.
Name a Trusted Contact
To reduce the chances of fraud or unauthorised activity, the account owner may designate an individual whom financial firms may contact to address possible financial exploitation, confirm contact information, or confirm the identity of someone instructing the firm based on their status as a guardian, executor, trustee or holder of a power of attorney. The trusted contact cannot see the owner’s balances, gather information about them, conduct transactions on the owner’s behalf or make changes to the account.
4. Put the Right Documents in Place
In an ideal world, your relative will have consulted an estate planning solicitor to create documents needed in the event of mental incapacity such as an enduring power of attorney, for example. However, if they have not, or if it has been a long time since those documents were developed, it may make sense to encourage the individual in decline to have an solicitor review and update them as needed. Importantly, the individual must have the mental capacity to sign those documents, often making time of the essence to accomplish this step.
5. Navigating Your Family’s Journey
Adapting to a relative’s declining mental capacity can feel overwhelming, but proactive steps can help lessen your burden and enhance the quality of life of your loved one. For some, it may be important to allow them to retain autonomy where possible. At the same time, you may believe that new protections are in order, requiring a degree of intervention that you might otherwise want to avoid. It is a delicate balance that, with a degree of care and planning, we believe you can achieve.
Source: New York Federal Reserve, “The Financial Consequences of Undiagnosed Memory Disorders,” May 2024.
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