Family Conflict Series: Who Controls the Money in Dementia Caregiving

Caring for a loved one with dementia is complicated; in addition to health care and personal care, it also involves navigating the finances of the individual they’re caring for.

From managing monthly bills to coordinating long-term care expenses, caregivers often find themselves making crucial financial decisions. And when multiple family members are involved, deciding who holds financial authority can spark tension, distrust, and family battles.

It’s often said that money is the root of all evil, and in family caregiving, it’s unfortunately often true. Money disagreements can tear families apart and interfere with caring for the person living with dementia. When responsibilities aren’t clearly defined, or when power struggles emerge, they can escalate into family battles over spending, budgeting, and decision-making.

Reasons Families Have Conflicts Over Finances

Families are complex, and when money is involved, it can further complicate family dynamics, especially when spouses, adult children, or stepchildren all want to be involved in the financial decision-making of a loved one with dementia.

Here’s why financial tensions can escalate:

Lack of Legal Documentation

When no one is legally authorized to make decisions, it allows others to get involved. It’s important to have one person who’s legally appointed to manage finances.

Consulting with an elder law attorney to establish a power of attorney (POA), a living will, or a financial power of attorney can simplify the process of handling insurance, healthcare decisions, and banking.

Fear of Losing Inheritance

It’s common for adult children to worry when a stepparent takes on the role of primary caregiver of their parent. They may have concerns about money being misspent or the possibility of the mismanagement of an inheritance.

Misunderstanding of Care Costs

Healthcare is expensive, and most people don’t understand and aren’t prepared for the financial responsibilities of caring for an individual with dementia.

According to Genworth’s Cost of Care Survey, the monthly median cost of a home health aide in the U.S. is $6,483, assisted living is $5,900, and the price of a private room in a nursing home is $10,646.

Many families assume Medicare or Medicaid will pay for expenses like long-term healthcare, but it doesn’t, and even when insurance pays for some of the cost, out-of-pocket costs can be extensive. When families aren’t educated on the cost of healthcare, it can cause conflicts.

Distrust and Old Family Wounds

Old family wounds can often lead to conflict during challenging times. This is particularly true when families come together to support a loved one during the last stages of dementia. Unfortunately, unhappy or disgruntled family members may use money as a weapon, which can exacerbate family disputes.

How to Prevent Financial Disputes

Preventing financial disputes within the family is essential for preserving not only relationships, but also the emotional, physical, and mental well-being of both caregivers and the individual with dementia. Caring for a person with dementia is hard enough without having to worry about disagreements over money.

Here are four strategies to foster clarity and trust concerning financial matters:

1. Establish a Durable Power of Attorney

A Durable Power of Attorney for healthcare is a legal document that allows you to name someone else to make decisions about your health care in case you are not able to make decisions for yourself. This should be established as soon as there’s a diagnosis, while the individual is able to express their wishes.

2. Provide Full Financial Transparency

Whomever is handling the finances should keep detailed financial records and provide complete transparency. The designated caregiver should provide detailed records of expenses, including receipts, insurance forms, and medical records.

3. Schedule Regular Family Updates

Scheduling routine family meetings helps ensure everyone is informed and engaged. During these updates, discuss healthcare decisions, monthly bills, treatment plans, and most importantly, how your loved one is doing. These conversations reduce accusations of financial mismanagement and unfounded accusations.

4. Set Clear Spending Expectations

Many family members are genuinely surprised by how quickly the costs of dementia care can escalate. Have open conversations about what the money will be used for, including

health care costs, prescription costs, insurance premiums, co-payments, home modifications, respite care, and personal needs.

When Family Disputes Cannot Be Resolved

Sometimes financial disagreements make it necessary to negotiate family disputes. Caregivers shouldn’t hesitate to hire an attorney or a court-appointed guardian to protect their role if family disputes become hostile. This takes it out of their hands and appoints it to someone who is working in the best interests of the person and the family.

A court-appointed guardian means everyone knows what finances are available, what care is needed, and they work through the services and plans of a physician’s care recommendations.

Wrap-up

Dementia is hard enough on families without the added burden of financial conflict. Don’t let money destroy your family and overshadow the care and support a loved one deserves.

When families plan ahead, establish a durable power of attorney, share financial information, hold regular family meetings, and ask for professional help when needed, they can prevent misunderstandings and reduce suspicions and keep everyone focused on providing the best possible care and support for the person with dementia and their caregiver.

To learn more, listen to the “Family Conflicts Series Episode 5: Who Controls the Money in Dementia Caregiving?” episode of The Disappearing Mind, an award-winning podcast hosted by National Dementia Coach Dawn Platt that helps listeners navigate along their personal journey with dementia through exclusive and direct perspectives of people diagnosed with the disease, their caregivers and experts in the field.