Helping parents consolidate their finances

[Julysky]

My dad has dementia and my mother and sister have power of attorney. My mother is his primary carer and doesn't have the time or energy to sort out his finances and my sister has a very busy job and family. I'm not working for a few months and have been asked to help consolidate the various bank and post office accounts and ensure that any payments in and out are all connected to one account. Does anyone have any advice on anything I should read up on in advance of getting started? TIA

I’m not an expert on this but I think you need to think about what situations your parents will face in the future and which arrangements will suit them best. It also depends how much money we are talking about. My DH and SIL did this for his parents when his mums Parkinson’s was advancing and it sparked all kinds of bigger financial discussions.

Eg if your father goes into residential care, then his income (pensions) and savings (half of any joint accounts) will be taken to pay for it. How much income does your mum have on her own? Could she live in her own pension or will she need to apply to keep some of his?

How do they own their property? Joint or in common?

first step was simply to sit down with the paperwork and make a list of all the accounts, what type they were, and what was happening with each / what it’s used for. Also all investments, and other assets eg car etc. Importantly you need to know whose name they are in.

Then a review of all the direct debits going out / money coming in their main accounts. DH found that his dad had two expensive subscriptions for broadband/internet running concurrently, that he was paying charges on multiple store cards he didn’t know they had (MIL had taken them out before she got ill), and that they had taken out a pointless large loan secured on the house at a swingeing interest rate and paying huge charges for nothing. It was ‘just in case’ - FIL liked seeing a big sum sitting in his current account.

We also found out after MIL died that she was actually the registered owner of their car, not FIL. she’d been in a home for years by that point and not driving anywhere.

Also, be aware that joint accounts are frozen of one of the account holders dies, then the surviving account holder gets it all. MILs savings, such as they were, were in a joint account when she died. Her will stated that all her assets should pass directly to her children - including the savings - but they didn’t. FIL also has dementia now, and is very paranoid about people ‘stealing his money’ so DH and SIL have just let it go rather than ask him to pass their mother’s savings on to them. It’s sad though, as this was one of the last things MIL did when she still had capacity. I think they always meant to create a new individual account for her, but they didn’t get round to it and her little pension just kept going into the old joint account.

They did set up an individual account for FIL, and transferred all the DD etc to that account. It kept things more simple when MIL went into residential care and was assessed for finances.