There are steps that we can take to assist our loved ones to manage their finances
Enduring powers of attorney can be critical for protecting the finances of our elderly, but there are also steps we can take to assist our communities to manage their finances before they put powers of attorney in place
Australia is in the midst of a demographic realignment and the population is ageing at a rapid rate. The ABS latest Household, Income and Wealth Report has found that over 50s make up 27% of Australia’s population. With ageing comes expected, but difficult health consequences, not the least of which is dementia. Dementia is the second leading cause of death of Australians (Australian Bureau of Statistics (2018) Causes of Death, Australia, 2017) and Dementia Australia now estimates (2019) there are 447,115 Australians living with the disease.
At the same time, our over 50s:
- Maintain 50% of Australia’s private wealth
- Buy 64% of all cars; 55% of all travel; 50% of all alcohol
“It might be that one person begins to lose the ability to handle money or make competent business decisions at an early stage, while somebody else might maintain these skills for longer.”
Although powers of attorney may be an inevitable step as a person’s health deteriorates, there are steps that we can take to assist our loved ones to manage their finances. In a recent article in the Sydney Morning Herald, “Dementia and ageing: When is it time to do a financial takeover?”, steps were outlined that everyone can take to help their friends and family manage their finances:
Simplify
Consolidate bank accounts and credit cards and help your loved one to keep track of them.
Set up systems
The elderly person may already have coping strategies in place, such as putting a bill on the fridge until it’s paid, to prompt their memory. To help support them, compile a list of all bills and when they are payable. Collate a document file, co
Monitor
Keeping an eye on financial affairs can be more difficult as banking shifts online. However, Anne McGowan (chief executive of Protecting Seniors Wealth) says it is important to review bank and credit statements for suspicious transactions. She advis
Power of attorney
While they have the capacity, they should put in place an enduring power of attorney, says McGowan. If they lose mental capacity before this is done, it will be too late. “It must be someone that they trust implicitly. Or it could be two people,” s
Prepare
Ensure any will is up to date; there is a binding death nomination for any superannuation savings; and loans or assets in exchange for care arrangements with adult children are fully documented in a family agreement.
Powers of Attorney
State Trustees can help you with your Powers of Attorney.
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