As the seniors in your life age, it is especially important for family members or legal representatives to keep a close eye on their finances.
The slow progression of dementia can manifest early on with poor judgment surrounding financial matters including allowing insurance policies to lapse, or forgetting to manage certain investments correctly. It can also become apparent in more obvious ways such as not paying bills on time or overpaying, or difficulty with simple math, and struggling to pay at a check-out counter. Older adults are also vulnerable to financial abuse and scams and should be reminded of red-flags.
Over 13 years of practicing as an Aging Life Care Manager, I have seen these financial problems play out in a variety of ways, and with such frequency, it’s hard to even keep track. Recently I started working with a client who has no children or spouse and untangling his finances has been both eye-opening and disturbing. It paints a picture of how dementia can take a toll on a person’s judgement and financial matters. Working with a bookkeeper to review bank statements and other files, we’ve been attempting to determine the origins of a very large loan that is leveraged against a modest stock portfolio. Since my client, who until his dementia was a very competent and successful business person, cannot explain why he has this loan or what he did with the money, we are left to just guess, and pick up the pieces of this situation. This client also never planned for his older years and has no retirement accounts, with social security as his only income. Now he is faced with an advancing dementia process and the need for full-time care. Coming up with a workable plan to fund his care is one of my main issues to solve.
Another client was an insurance agent and prided himself with having lots of insurance for himself and his family…life insurance, accident insurance, etc. At some point he stopped paying his own life insurance which lapsed unbeknownst to his family, leaving his spouse without a death benefit when he passed away from Alzheimer’s while on Medicaid in a nursing home. His spouse was 14 years younger and had counted on that policy for her own old age.
With another case, the two sons of a couple in their late 80’s needed my help in a crisis when both parents were not well, one with dementia wandering out of the home and aggressive, and the other with medical issues and very frail. The children sadly discovered that their father had over-mortgaged the home, leaving no funding at all for their care. Just paying the basic household expenses was impossible. Both needed to move into facilities and apply for Medicaid while the sons worked to sell the home and pay off the debt.
Another couple I recently met for a consultation revealed their spending habits were now dangerously outpacing their need for savings to sustain them in their older years. Country clubs, travel and lack of planning seemed to blame, but so was the husband’s Alzheimer’s process and the wife’s poor understanding of their finances throughout their marriage. An adult son was now trying to assist them with a budget, moving to a more affordable home, and cancelling or scaling back unnecessary expenses.
So, what can you do? To start, you’ll need to have a frank discussion. Be sure to ask about finances, and if they will allow, gain access to bank accounts and statements. Also make sure that elders have the proper legal documents in place before dementia might creep in without realizing it. All too often, by the time family members notice something is wrong, irreparable damage may already be done. And if you need help navigating the unpredictable waters of aging, speak to an Aging Life Care Professional.
To read more about dementia’s impact on finances, this recent NY Times article provides some other examples:
by Joan Garbow, MSW, LCSW, CCM
Advanced Member of The Aging Life Care Association