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Writer's pictureMerBess Care

How to Protect a Family Member with Dementia from Financial Ruin as Their Condition Deteriorates




Caring for a loved one with dementia can be a challenging journey, especially when it comes to protecting them from financial mistakes or potential fraud as their cognitive abilities decline. Dementia affects decision-making, memory, and reasoning, putting individuals at risk of mismanaging their finances or falling victim to scams. To safeguard your loved one’s financial wellbeing, it’s essential to put measures in place as soon as possible.

At MerBess Care, Senior Home Care, we understand the unique challenges that families face when caring for a loved one with dementia. Alongside providing high-quality home care services, we also encourage families to take proactive steps in securing their loved one’s financial future. Below, we’ve outlined key strategies to protect a family member with dementia from financial ruin.


1. Start the Conversation Early

One of the most important things you can do is start discussing finances with your family member as soon as signs of cognitive decline appear. Although it can be a difficult conversation, it’s essential to address their financial situation while they are still able to participate in decision-making.

Ask about:

  • Their accounts (banks, investments, retirement funds)

  • Monthly bills and subscriptions

  • Estate planning documents (wills, trusts, power of attorney)

Having a clear picture of their financial landscape will make it easier to implement protective measures as their condition worsens.


2. Establish a Durable Power of Attorney

A Durable Power of Attorney (POA) allows a designated individual to manage financial decisions on behalf of the person with dementia, even if they become incapacitated. This is one of the most effective legal tools for protecting your loved one’s finances.

It’s critical to establish this document while your family member is still mentally competent. Work with an attorney to ensure the POA covers all necessary financial matters, including banking, investments, and property management.

3. Set Up a Trust

In some cases, creating a living trust is a helpful way to manage assets for a loved one with dementia. A trust allows a trustee (someone you or your loved one designates) to manage their assets according to their wishes. It offers more control over how assets are handled and distributed and can protect against financial mismanagement if dementia progresses.

Trusts can be complex, so it’s important to consult with an estate planning attorney to ensure it aligns with your family member’s needs.

4. Monitor Financial Accounts

Regularly monitoring your loved one’s financial accounts can help detect any unusual activity before it leads to significant financial harm. Set up online access to their accounts and request monthly statements. Look for red flags like:

  • Large, unexplained withdrawals

  • New credit card applications

  • Unusual purchases

  • Late payments on bills

At MerBess Care, Senior Home Care, our caregivers can assist with keeping track of day-to-day expenses and notifying families if they notice any unusual financial behavior.

5. Limit Access to Credit and Debit Cards

As dementia progresses, it may be wise to limit or remove access to credit and debit cards to prevent impulse spending or falling victim to fraud. You can:

  • Set up low-limit credit cards for small purchases

  • Use a prepaid debit card with a set amount of funds

  • Remove credit card information from online shopping accounts

This limits their ability to make large or risky purchases that could negatively impact their finances.

6. Automate Bill Payments

Automating essential payments (e.g., utilities, mortgage, insurance) can help prevent late fees, missed payments, or services being cut off. Setting up automatic payments ensures that all bills are paid on time, without relying on your loved one to remember due dates.

If you’re handling the financial management, tools like online banking alerts can notify you when payments are made or if an account balance is running low.

7. Guard Against Scams and Fraud

Unfortunately, individuals with dementia are often targeted by scammers. Protect your loved one from financial exploitation by:

  • Registering their phone number on the National Do Not Call Registry to reduce telemarketing calls.

  • Limiting unsolicited mail, such as sweepstakes or donation requests, by removing them from marketing lists.

  • Educating them about common scams, like fake IRS calls, lottery fraud, or phishing emails.

In addition, consider adding a fraud alert to their credit file with major credit bureaus to prevent identity theft.

8. Review and Update Estate Planning Documents

As your loved one’s condition worsens, it’s critical to ensure that their estate planning documents are in order. This includes reviewing and updating their:

  • Will

  • Trusts

  • Power of Attorney (medical and financial)

  • Advance healthcare directives

Making sure these documents are up-to-date and legally binding will help avoid conflicts down the road and ensure that your loved one’s wishes are honored.

9. Work with a Financial Advisor or Elder Law Attorney

Hiring a financial advisor or elder law attorney who specializes in working with seniors or those with dementia can provide expert guidance on managing and protecting finances. They can help you understand your loved one’s financial standing, ensure all legal documents are in place, and create strategies for long-term financial security.

10. Consider Professional In-Home Care Support

Managing your loved one’s health and finances can be overwhelming, especially as their condition deteriorates. Hiring a professional caregiver through MerBess Care, Senior Home Care can provide the support needed to monitor your loved one’s day-to-day activities, including helping with bill reminders, budgeting for groceries, and keeping an eye out for any signs of financial confusion or vulnerability.

Our compassionate caregivers are trained to care for individuals with dementia, providing not only assistance with daily living but also peace of mind for family members who are concerned about their loved one’s safety, health, and financial wellbeing.


Protecting a family member with dementia from financial ruin is a vital responsibility, requiring proactive steps and legal safeguards. By establishing a durable power of attorney, monitoring their finances, guarding against fraud, and seeking professional advice, you can help preserve their financial stability as their condition progresses.


At MerBess Care, Senior Home Care, we are committed to helping families care for their loved ones, offering comprehensive home care services tailored to the needs of those with dementia. Contact us today to learn more about how we can support you and your loved one in managing both their health and finances.

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