Money and memory loss

Protect yourself and your loved ones

As people get older, having trouble managing their finances is often one of the first signs of cognitive impairment or dementia. If an aging loved one was once able to pay bills and balance a checkbook easily, but now makes frequent mistakes or finds the tasks difficult and confusing, it may be a sign of an emerging disability.

Mismanaging finances can have devastating effects from which older adults with limited resources may be unable to recover. Dementia can make older adults more susceptible to fraud and other forms of financial abuse. There are steps you can take to protect your loved ones – and yourself! – from financial trouble stemming from cognitive decline.

1. Put estate-planning documents in place

Your aging loved one can grant durable power of attorney to a trusted family member or friend, allowing that person to act on their behalf if they become incapacitated. This must be done while the person still has the mental capacity to sign legal documents, so it's a good idea to do it sooner rather than later.

Powers of attorney can be broad, granting the named agent or attorney-in-fact authority to make decisions regarding most of the individual's personal and financial affairs or more narrowly defined, applying only to particular issues.

Your family member might also want to set up a revocable living trust, which puts a trustee in a position to protect assets in the event your loved one becomes incapacitated.

2. Work with a financial advisor

Talking about finances is difficult in many families. It can be a touchy subject, and siblings or parents and their children may not always agree or even be willing to discuss the issues. But including a neutral third party like a financial advisor can help ease the conversation in many cases.

A financial advisor may also notice if a loved one starts making financial moves that are out of character or irrational.

3. Watch for warning signs of cognitive impairment

Stay closely enough involved in your loved one's life that you can notice signs such as:

• Memory lapses, such as forgetting to pay bills or paying them twice.
• Poor organization – a once-neat desk is now buried under a pile of papers, or mail remains unopened for months.
• Math mistakes in everyday life, such as figuring a tip in a restaurant or balancing a checkbook.
• Confusion or failure to understand financial concepts that were understood earlier.
• Impaired judgment, such as a new interest in get-rich-quick schemes, developing an unrealistic anxiety about finances, even if they're in fine shape or a desire to donate everything to help victims of a disaster.

Cognitive impairment can have a variety of causes, and some of them can be managed or reversed, so it's important for your loved one to see a doctor right away. At [This Community], keeping your loved one safe and healthy is our priority. Visit us at www.prescommunities.org to learn more about memory care.