Memory loss, dementia and your money
How planning now can protect your
Most of us will have some memory loss as we age. However, for
some people, significant memory loss, arising from illnesses such
as dementia, can be a problem. When it gets to the point where you
are struggling to manage your finances it's important to put some
safeguards in place.
Here we explain how to set up your finances so they can continue
to be managed responsibly if you can no longer do this
How memory loss can affect your finances
Memory loss can make it difficult to stay in control of your
money. Things you found easy before - like tracking your spending,
checking your bank statements or investments, or even paying your
bills - may become challenging or you may just not remember you
need to do them.
You may also find it hard to take in and absorb information from
banking staff or your financial adviser or accountant.
All these factors mean you may not be making the best financial
decisions or be able to keep up with the regular maintenance of
Case study: Vivian starts struggling with her finances
Vivian was in her eighties
when her son Alan noticed she had become increasingly
forgetful. At first she would just lose her train of thought
during a conversation but, after a few months, Vivian also had
difficulty finding the words she wanted to say. Alan then
found some overdue electricity bills on her kitchen table. When he
asked her about them, she said she had forgotten they were
Alan helped Vivian pay her overdue bills and then took her to
see her doctor to get her health assessed. He also helped her
consolidate her bank accounts and set up a list of her regular
bills so she would not forget to pay them.
To help recognise the signs of dementia, visit Is it
dementia, a resource created by Alzheimer's Australia.
Plan ahead to protect your
Planning for the future is important for everyone, but this is
especially true as you age.
Although it can be confronting to think about what you want to
happen when you can no longer make decisions for yourself, putting
a plan in place is the best way to ensure your wishes are carried
out. It also relieves your loved ones of the stress of having
to make these decisions for you.
Here are some steps you can take to protect your money:
Simplify your finances
To help you stay in control of your money as you age, and make
it easier for your loved ones to help you, here are some ways you
can simplify your finances:
- Consolidate your transaction accounts into one.
- Reduce the number of credit cards and store cards you
- Close your cheque account.
- If you have super in more than one account, consolidate them
into a single account.
- Put a list on your fridge of what your regular bills are and
when they come in (e.g. phone monthly, electricity quarterly, rates
- Put a 'tick' beside each bill once you've paid it.
- Put unpaid bills on the fridge and take them down when they
have been paid.
- Consider whether you would like to set up direct debits to
pay some of your bills.
Appoint an enduring power of attorney
power of attorney allows you to choose a person to manage your
affairs if you lose the ability to make these decisions for
yourself. If you do not have these plans in place then a
court or tribunal may need to appoint someone to take care of this
Who to choose?
It is important to choose someone you trust as your enduring
power of attorney. They will be responsible for looking after your
bank account, paying your bills, and even selling your house if you
need to move into an aged care facility. You need to feel confident
they will act in your best interests.
This person could be your spouse, child, another relative or
friend. Alternatively, it could be an independent person,
such as the Public Trustee, or your solicitor. Some people
prefer to appoint two people to be their enduring powers of
attorney. If you do this, you need to be confident that they will
generally agree on what is in your best interests.
Whether you choose one person or two people for this role, it is
important they understand the responsibilities and legal
obligations of an enduring power of attorney.
No matter who you appoint, you should discuss your decision with
your family so everyone knows and understands your wishes.
This will help avoid disputes later on.
In some states, you may need to set up separate arrangements to
nominate someone to make medical decisions on your behalf. Advance Care Planning
Australia has more information about this.
Update your will
Review your will to make sure it is up to date. If you
don't already have a will, now is the time to create one.
To make a valid will, you need to be able to understand the
decisions you make about your assets and the effect these decisions
will have, so it is better to make or update your will before being
diagnosed with dementia. Our article on wills and power of
attorney has more information.
A diagnosis of dementia does not automatically mean you have
lost capacity to make these decisions for yourself. However,
if you are concerned about memory loss, or someone close to you has
been diagnosed with dementia or another form of memory impairment,
it is important to acknowledge the issue and obtain legal advice,
or consult the Public Trustee, to help you create or update your
Here are details for the Public Trustee in each state.
It is a good idea to give a copy of your will to your
beneficiaries. This is especially useful if you only have one
beneficiary, in case you misplace your copy of the will.
Get your super in order
Nominate your super beneficiaries
Unlike your other assets, your super account does not
automatically form part of your estate. This means you cannot
nominate the beneficiaries of your superannuation through your
To ensure your super fund goes to the people you choose when you
die, you need to make a binding beneficiary nomination (sometimes
called a binding death benefit nomination) through
your super fund.
Alternatively, you could nominate your estate as the beneficiary
of your super fund. Doing this will ensure your super
benefits will be distributed according to the terms of your
Visit our super death benefits page for more
Reconsider your self-managed super fund (SMSF)
Running your own super fund can be very complex, and there can
be very serious financial consequences if you can no longer manage
If you are diagnosed with dementia or you suspect memory
impairment, consider changing your super arrangements. You
could transfer your super assets to a managed fund. Alternatively,
you could nominate someone you trust, and who has the right skills,
to take over your trustee role as your legal personal
For more information, visit our page on getting out
of an SMSF.
Sort out your important documents
For your own peace of mind, and to make things easier for your
power of attorney, it is a great idea to set up a file of your
personal and financial information. You could also keep a
duplicate file containing copies of these documents in a safe
location (such as a safe deposit box with your bank, or with your
solicitor). Create a list setting out where these files are
The key documents you should include in this file are:
- Birth certificate
- Marriage certificate
- Enduring power of attorney or guardian details
- Personal insurance policies
- Tax File Number
- Centrelink/DVA Client Reference Numbers
- A list of all of your assets
- House deeds
- Home and contents insurance
- Deeds and insurance policies for any other real estate you
- Bank account details
- List of any direct debits
- Mortgage documents
- Superannuation papers
- Documents related to any loans you may have
- Investment documents (securities, share certificates,
- Any pre-payments of funeral investments or plans
from financial abuse
If you suffer memory loss, you have to rely more heavily on the
people around you and trust them to take care of you.
Unfortunately, this can leave you vulnerable to people who might
wish to take advantage of that trust.
Your family and friends might have their own opinions about who
should be in control of your money or property, but it is important
that they do not pressure you or try to influence your
decision. This is financial abuse.
Elder abuse is one of the most common forms of financial abuse,
and people with dementia are higher risk of this happening to
See our financial abuse webpage for the signs
to watch out for and where you can get help.
Where to get support to plan
Our elder care and seniors
support page has the contact details of a range of national and
state-based organisations that can provide advice, support and
assistance for you. The start2talk website also has a lot of useful
information and resources for each state and territory about
planning ahead for your future.
Taking steps now to protect your future
financial interests is not only empowering, but can help you and
your loved ones avoid unnecessary problems in the
Last updated: 20 Jun 2017