Early-Stage Dementia: Protecting Elderly Parents' Assets

Even without dementia, your aging loved one may still be struggling with their finances, which is always cause for concern and intervention. Learn how to tell if your elderly parent is having trouble managing their money and the steps you can take immediately to protect their assets.

People in the early stages of memory loss may still be able to do simple financial tasks, like paying for groceries or services. However, they often have trouble with more complex tasks, such as filing taxes, balancing their budget, or remembering to pay all their bills and debts. Dementia and money management issues may not always be easy to spot, especially if your loved one is in the early stages of memory loss.

Stay alert for common signs that your parents are having difficulty managing money

• Trouble with common skills, like budgeting or organizing financial documents
• Late or forgotten bill payments
• Utility service disconnections
• Missed calls from their bank or bill collectors
• Missing money from their bank account
• Unusual purchases or merchandise at home

The following are some simple and more complex steps you can take to protect your elderly parents’ assets:

1. Talk to your loved one often and as soon as possible about their wishes for the future. Also, discuss your desire to help them succeed. See below for four tips on starting the conversation with your parents about protecting their finances during early-stage dementia.
2. Block scammers from calling, and add your parents’ home and mobile phone numbers to the National Do Not Call Registry. This helps prevent elder abuse before their phone ever rings.
3. Sign your parents up for free credit reports through one of the three nationwide consumer credit reporting companies: Equifax, Experian, and TransUnion. Federal law requires those companies to give you a free credit report every 12 months if you ask for it. This makes keeping an eye out for any unusual activity or potential fraud easier for you and your parent.
4. Set up automatic payments with your parent and have their utility bills, rent or mortgage payments, and credit card payments taken care of automatically.
5. Agree on a daily spending limit with your parent on credit and debit card purchases. If overspending continues, consider giving your loved one preloaded bank cards instead of regular credit or debit cards.
6. Weigh the pros and cons of opening a joint banking accountwith your parent.
7. Learn more about your parent’s estate and their goals for its future. What were their financial ambitions when they started their estate, and what guided their choices? Understanding this can help you both plan for their future together from a more-informed place.
8. Discuss simplifying your parent’s financial portfolio, and enlist the help of a certified financial planner. A financial planner can teach you various ways to simplify your parent’s portfolio and how to set aside money for their long-term care needs, especially if memory care is a growing concern. Do your research to help ensure this planner has no bad reviews or claims against them of elder financial abuse.
9. Designate a durable power of attorney (POA)by talking with an elder law attorney. An agent appointed under a durable POA can act on a person’s behalf in financial and legal matters, even if the person becomes incapacitated. A durable POA can help ensure your parents’ assets stay in the right hands, according to the National Institute on Aging. Send this document to any company, organization, or facility your parents use, so you can communicate with them on your parents’ behalf.
10. Establish a living trust by talking with an elder law attorney. A trustee, other than your parents, can be designated to manage your parents’ assets that are transferred to a living trust. This living trust provides guidance on managing your parents’ estate. The trustee follows these instructions when a parent with dementia is no longer able to manage their affairs.

Even if family members vigilantly guard against senior fraud, scammers can still take advantage of seniors with memory loss via telephone, e-mail, and in-person scams. Con artists can be very convincing, and your loved one may quickly become a victim of elder financial abuse. Scammers know how to apply pressure to get seniors to act before considering the consequences.

It’s not uncommon for seniors to give their credit card number or other sensitive information over the phone to someone pretending to be a grandchild in need. Sadly, people that commit elder financial abuse are sometimes friends or family members looking to take advantage of a senior’s diminishing cognitive ability.

Stay alert for the following signs of scammers:

• Strange-looking signatures on checks or legal documents
• Stories or evidence of unexplained money transfers
• Sudden changes in your parents’ will
• Changes to the mortgage, loans, or other major financial agreements
• Missing jewelry or cash
• Newly established lines of credit
• Frequent phone solicitations or calls from telemarketers
• Repeated calls from unknown numbers at the same times of day
• Written threats of extortion
• Non-FDA-approved medical devices or procedures
• Unnecessary home or auto repairs
• Unusual requests for sizeable charitable donations

If you think your parent has been the victim of a scam, you should take action quickly. You can notify the following agencies:

• Your local police
• Your state consumer protection office
• Your Area Agency on Aging office

Remember, despite your best intentions, your parents still have the final say on money matters until they can no longer make decisions for themselves.

To help protect your parents from both elder financial abuse and general financial risks, try these tips to start a conversation with them about their finances:

1. Start the conversation as soon as possible. Dementia progresses at various rates, so you may not know exactly when to step in. Talking about dementia and money management is easier in the earlier stages, especially when covering sensitive subjects like preventing elder abuse. During later stages, you may be preoccupied with the task of moving your loved one into a memory care community and may not have the time or energy for these difficult conversations.
2. Keep it simple and about them. Emphasize that you want what they want: You are simply there to help protect their assets and prevent elder financial abuse. Explain how financial abuse is more common in individuals with memory loss, and explain how a durable power of attorney may help protect them in the future from financial exploitation and financial mismanagement.
3. Give them some time. Emotions can easily spike when discussing something as sensitive as finances. Your parents may not realize or accept that they’re having difficulties. They may accuse you of trying to take control of their estate. When emotions get out of control, give yourself and your parent time to process concerns and suggestions. It may be helpful to have several meetings over several weeks to discuss needed steps.
4. Consider including a third party. Even if your parent is experiencing memory problems, it can be tough for them to loosen their parental role by discussing finances with their child. Conversations may go better if you include a neutral third party, such as an elder law attorney or financial advisor. These professionals can add another layer of protection for your parents’ assets, and they can validate your concerns and desire to get your parents help sooner rather than later.

Sources:

National Institute on Aging. “Legal and financial planning for people with Alzheimer’s.”

Federal Trade Commission. “Family emergency scams.”

Journal of American Medical Association. “Financial Presentation of Alzheimer Disease and Related Dementias”