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Tuesday, August 16, 2011

How do you know if an aging parent can't handle finances any more?

Last night there was a report on the news about an elderly woman with dementia whose daughter had arranged that two signatures (hers and her mother's) were necessary for a safety deposit box to be opened. Unfortunately the bank procedures weren't properly followed, the mother accessed the box without the daughter present, and now thousands of dollars worth of jewelry are missing. (Yes, I appeared briefly on that segment - if you blinked you probably missed me).

This story has led to quite a bit of discussion about how people know when an aging parent is experiencing dementia.

An important thing to know about dementia in an older person is that in the absence of some kind of injury (including stroke) or sudden illness, loss of mental capacity can happen slowly. And as with many types of change that take place slowly, it may take a while for isolated incidents to add up to a realization that a parent is experiencing dementia.

What are the signs that an elderly person might be having difficulty looking after their own financial affairs, and that it might be a good idea to step in? Here are some common signs:

-  the mail is piling up, unopened, at the senior's home, indicating that the senior isn't dealing with matters such as banking, insurance, investments, bills etc.
-  bills haven't been paid, sometimes resulting in the cut-off of important services such as telephone or heat
-  bills are being paid repeatedly due to the senior forgetting that he or she has already paid it
-  cheques are lying around instead of being deposited, or are misplaced
-  the senior has been, or could easily be, taken advantage of financially by scam artists, strangers or family members
-  irrational changes are being made to the senior's will
-  the senior can no longer manage small financial transactions such as paying a restaurant bill or making a purchase at a store, that he or she used to be able to do easily
-  large sums of money are withdrawn from the bank but the senior can't remember making the withdrawal or remember what the money was used for
-  the senior is transferring assets to friends or family members (including setting up joint bank accounts) for no apparent reason
-  the senior has made a new, recent friend who seems to exert a lot of influence on him or her, and to whom the senior is giving money
- the senior is experiencing a great deal of anxiety regarding money, such as being afraid to buy groceries or thinking he or she might be evicted from their home, even though there is enough money to pay the bills
-  the senior is making irrational purchases, such as cans of dog food even though he or she doesn't own a dog

Be careful about deciding that someone has lost capacity. Personality, personal wishes, and physical limitations all influence financial decisions, and the fact that you don't like what a parent is doing with money doesn't make the parent incapable. If you believe that your parent is experiencing dementia, make sure that he or she sees a doctor for that diagnosis.

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