My Parent Just Got Diagnosed With Dementia: What Do We Do About Their Finances?

The most important financial step after a dementia diagnosis in Ohio is this: get a durable power of attorney in place right now, while your parent still has legal capacity to sign it. If you wait until capacity is gone, it is too late. And the alternative — going to court for guardianship — takes months, costs thousands, and is far more painful for your family.

Beyond that first step, a dementia diagnosis sets off a chain of financial and legal decisions that most families are not prepared for. This guide walks through exactly what to do, in order, so you can move forward with clarity instead of panic.

Why timing matters more than anything In Ohio, a person can only sign legal documents like a power of attorney or healthcare directive while they have legal capacity — the ability to understand what they are signing. Dementia is progressive. The window to get these documents in place can close faster than families expect. Do not wait for a ‘good day.’ Call an elder law attorney this week.

Step 1: Secure durable power of attorney while your parent still can

A durable power of attorney (POA) is a legal document that gives a trusted person — usually a family member — the authority to make financial decisions on your parent’s behalf. In Ohio, ‘durable’ means it stays valid even after the person becomes incapacitated.

Without a POA:

• No one can legally access your parent’s bank accounts to pay their bills.
• No one can manage their investments, real estate, or property.
• Your family would need to go to Ohio probate court to get guardianship or conservatorship, which takes months and costs thousands.

With a POA in place, the designated agent can step in immediately and manage finances without any court involvement.

The critical window: your parent must have the legal and mental capacity to understand what they are signing at the time of signing. An elder law attorney can assess this and document the signing process in a way that protects the document from future challenges. Do not use an online template for this.

Step 2: Put a healthcare directive in place at the same time

A healthcare directive (also called an advance directive or living will) is a separate document from a POA. It tells doctors and family members what medical care your parent wants if they cannot speak for themselves.

This document addresses:

• Life support and resuscitation wishes.
• Feeding tube decisions.
• Pain management preferences.
• Who can speak on their behalf for medical decisions (healthcare proxy).

The POA covers financial decisions. The healthcare directive covers medical decisions. Your parent needs both. An elder law attorney typically prepares these together in a single planning session.

Step 3: Take a full inventory of your parent’s assets

Before you can make any financial decisions, you need to know what you are working with. This is often harder than families expect.

Look for:

• Bank accounts: checking, savings, CDs. Are they individual or joint?
• Real estate: how is the property titled? Is there a mortgage? A home equity line of credit?
• Retirement accounts: IRA, 401(k), pension. Who are the named beneficiaries?
• Investment accounts: brokerage accounts, annuities, life insurance.
• Debts: credit cards, loans, medical bills.
• Benefits: Social Security, Medicare, any pension income. Is your parent a veteran? VA benefits may be available.

Gather statements, deeds, and account numbers. Look for a filing cabinet, safe, or document folder at home. Many families find that their parent kept these things organized — they just did not know where to look.

Step 4: Talk to an elder law attorney before moving any money

This is the step families most often skip, and it is the most expensive mistake they make.

Well-meaning families will sometimes start moving money out of a parent’s accounts to ‘protect it’ from a future nursing home. They do not realize that Ohio Medicaid has a 5-year lookback rule that reviews every transfer made before a Medicaid application. Gifts made during that window can create a penalty period that delays Medicaid coverage, sometimes by months.

Before you transfer, gift, or retitle anything:

• Talk to an elder law attorney.
• Understand how the Medicaid lookback rule works in Ohio.
• Understand what assets are protected and what are not.

The strategies that actually protect assets — Medicaid asset protection trusts, spousal protections, exempt asset conversions — require an attorney to implement correctly. A phone call before you do anything else can save your family tens of thousands of dollars.

Step 5: Start thinking about long-term care needs and costs

Not every dementia diagnosis means a nursing home is coming tomorrow. Many people live at home for years with the right support. But planning ahead for the possibility matters, because the financial picture changes dramatically depending on how care is handled.

• In-home care in Ohio costs approximately $5,500 to $6,500 per month for full-time help.
• Memory care assisted living costs approximately $5,000 to $8,500 per month.
• Nursing home care in Ohio averages $9,400 per month for a private room.

Medicaid can cover nursing home costs for those who qualify, but it requires planning. Long-term care insurance, if your parent has it, can help. VA benefits for veterans may also be available.

An elder law attorney can help you map out what the financial picture looks like across different scenarios so you are not making decisions in the dark.

Step 6: Have the family conversation now, while your parent can still participate

One of the hardest parts of a dementia diagnosis is the feeling that decisions are being made for someone rather than with them. When possible, include your parent in these conversations while they still have capacity.

Ask them:

• Who do you want to handle your finances if you cannot?
• Where do you want to live if you need more care?
• What matters most to you about your care?
• Are there things you definitely do not want done medically?

These conversations are hard. They are also one of the most loving things you can do. And having your parent’s expressed wishes documented protects them and protects your family from conflict later.

Frequently asked questions about dementia and financial planning in Ohio

What if my parent already has moderate dementia — can they still sign a POA?

It depends on whether they still have legal capacity, which is different from memory loss. Someone with moderate dementia may still understand what they are signing on certain days or in certain conditions. An elder law attorney can assess this carefully and document the signing properly. Do not assume it is too late until you have spoken with an attorney.

What happens if my parent has no POA and is no longer capable of signing one?

Your family would need to go to Ohio probate court to establish a guardianship or conservatorship. This is a court-supervised process that typically takes 3 to 6 months, requires a filing fee, legal representation, and ongoing court oversight. It is exactly what the POA was designed to prevent. If you are in this situation, an elder law attorney can guide you through the guardianship process.

Do siblings all have to agree on financial decisions?

If only one sibling is named as agent under the POA, that person has the legal authority to make decisions. Practically speaking, family communication and transparency matters enormously. An elder law attorney can help structure the documents in a way that promotes accountability and reduces conflict.

Will Medicaid pay for dementia care in Ohio?

Medicaid can cover nursing home care for qualifying individuals with dementia. Whether your parent qualifies depends on their income and assets. The 5-year lookback rule applies, and planning well in advance gives your family the most protection. An elder law attorney can assess your parent’s specific situation.

Can we move our parent’s money to protect it from nursing home costs?

Not without understanding the Medicaid rules first. Transfers made within 5 years of a Medicaid application can trigger a penalty period. There are legal strategies to protect assets, but they must be structured correctly. Please speak with an elder law attorney before moving any money.

You do not have to figure this out alone.

A dementia diagnosis is one of the hardest things a family faces. The legal and financial decisions that come with it do not have to make it harder. Collins & Kruse guides Ohio families through exactly this situation, every day.

We are a veteran-owned elder law firm with offices in Columbus and Findlay, Ohio. Your first consultation is free. No pressure, no obligation. Just a clear conversation about what you can do.

Call 614-369-8634 (Columbus) or 419-365-6900 (Findlay). Or contact us today.