Memory loss, dementia and your money

How planning now can protect your future

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 yourself.

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.

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 your money.

 To help recognise the signs of dementia, visit Is it dementia, a resource created by Alzheimer's Australia.

Plan ahead to protect your money

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, setting up a plan is the best way to ensure your wishes will be 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 have.
  • 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 annually). 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

An enduring 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 for you. 

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 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. 

Medical decisions

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 will.

Here are details for the Public Trustee in each state and territory.

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 will.

To ensure your super fund goes to the people you choose when you die, you need to make a binding death benefit nomination (sometimes called a binding beneficiary nomination) through your super fund. 

Alternatively, you could nominate your estate as the beneficiary of your super fund. This will ensure your super benefits will be distributed according to the terms of your will.

Visit the page on getting your super for more information.

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 it properly. 

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 representative.

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 located.

The key documents you should include in this file are listed in the table below.

Category Examples of documents
Personal documents
  • Birth certificate
  • Marriage certificate
  • Will
  • 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 documents
  • House deeds
  • Home and contents insurance
  • Deeds and insurance policies for any other real estate you own
Financial documents
  • 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, bonds)
  • Any pre-payments of funeral investments or plans
Health documents

Protect yourself 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 them.

See our financial abuse webpage for the signs to watch out for and where you can get help.

Where to get support to plan your future

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 future.

Related links

Last updated: 12 Feb 2019