Fiscal chaos can precede Alzheimer's

If you have senior parents, you may think discussing money with them might be difficult. Add cognition issues, and you have truly zeroed in on the third rail of senior concerns.

Cognitive loss in seniors is a very sensitive topic. Not only is it sensitive to discuss with a senior, but it’s even more sensitive for seniors to discuss amongst themselves. Thus, a New York Times article titled “Alzheimer’s Takes a Financial Toll Long Before Diagnosis, Study Finds”¹ was especially eye-catching.

The article referred to a study jointly conducted by the Federal Reserve Bank of New York and Georgetown University, which studied data from Medicare records and Equifax, the credit bureau. “What they found was striking: Credit scores among people who later develop dementia begin falling sharply long before their disease is formally identified.”

“The research adds to a growing body of work documenting what many Alzheimer’s patients and their families already know: Decision-making, including on financial matters, can begin to deteriorate long before a diagnosis is made or even suspected.”

“People who are starting to experience cognitive decline may miss payments, make impulsive purchases or put money into risky investments they would not have considered before the disease.” Especially troubling: “People in the early stages of the disease are also vulnerable to scams and frauds…”

While the researchers noted that “their findings should be a warning to older Americans and their families that they should prepare for the possibility of an Alzheimer’s diagnosis,” there are steps that can be taken to mitigate future problems with personal finances.

• If you’re a senior, be open about your finances with your children. If you don’t have adult children or would rather not discuss this topic with them, enlist the aid of a trusted friend.
• If you’re a client, sign a trusted contact form that will allow us to contact a family member or friend if we detect any unusual behavior. While we’re obviously not experts in mental health, an observed unusual behavior or comment could initiate a conversation with a loved one.  If you’d like to sign a new form (or update an existing one), please contact us, and we can help you make the appropriate updates.
• If you have certain policies that are subject to cancellation if not paid on a timely basis (e.g., long-term care, life insurance, a rental agreement), tell the other party (e.g., the insurance company) you want to have a trusted family member or friend notified if you are late on a payment. Imagine the devastation if someone held a long-term care policy for dozens of years and then missed one premium payment. Hundreds of thousands of dollars of benefits would likely be forfeited. (Third-party designee forms are quite standard among many financial companies.)

If you’re a senior, forgetting to add the occasional check to your bank ledger probably shouldn’t be grounds for you to suspect you’re in cognitive decline. But if you take an action that is truly out of character, it might be time to have a serious discussion with a family member or close friend. The goal is not merely to see if you need help but to ensure your assets aren’t squandered. 

Finally, please, please, please contact us immediately if you ever encounter a situation that is either troubling or perplexing and can result in financial harm. There is virtually NEVER a situation that cries out for an immediate financial response. If you feel pressured to do something, stop and email or call us. The people who commit fraud are very good at what they do, and if they catch you on an off day, the damage they can do can be devastating.

¹ Casselman, Ben. “Alzheimer’s Takes a Financial Toll Long Before Diagnosis, Study Finds.” The New York Times, 3 June 2024.