Oct 14, 2012

Financial Matters, Money, and Dementia

Many families are not aware that one of the earliest signs of mild cognitive impairment, Alzheimer's or related dementia are difficulties in managing financial affairs.

By Carole Larkin
Alzheimer's Reading Room

Financial Matters, Money, and Dementia
The financial difficulties can include things like paying bills on time, balancing the checkbook,  making decisions on investments or money, and suspicious financial transactions.

In an article titled The Emerging Neuroscience of Financial Capacity written by Amy J. Knight and Daniel C. Marson studies showed that persons with mild cognitive impairment (MCI) had mild financial deficits (Griffith et al., 2003).

Persons with mild Alzheimer’s disease had global financial deficits (Marson et al., 2000) and persons with moderate Alzheimer’s disease had advanced global financial impairment  (Marson et al., 2000). Source Generations, the Journal of the American Society on Aging.

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Declines in financial capacity were shown to be some of the earliest changes seen in the transition to dementia (Triebel et al., 2009),  and that there were further rapid declines in financial skills over a one year period in patients with mild Alzheimer’s disease (Martin et al., 2008).

The studies show that deficits in the following cognitive processes contribute to the reduction of capacity to carry out financial affairs.

  • Working memory  (Working memory is a system for temporarily storing and managing the information required to carry out complex cognitive tasks such as learning, reasoning, and comprehension).
  • Attention span
  • Executive skills (areas such as goal formation, planning, self monitoring, response inhibition, and coordination and sequencing of complex behaviors)

These deficits can show up long before some of the other trademark indicators of cognitive impairment, such as getting lost while driving the car, repetition of speech and/or questions, illogical statements and personality changes.

Why is it that these changes are not noted by other family members? I think that there are a couple of fairly obvious reasons.

Finances have traditionally been one of the “verboten” (forbidden) topics of discussion between family members, especially between parents and their children, but sometimes even between the two spouses.

Parents tend to protect their children from such real life issues, while the children are young, especially from problems and/or setbacks in financial matters, fearing the knowledge will cause psychological problems for the children.

For persons currently 75 years old or older, this phenomenon was enhanced by the events happening in the past such as the Great Depression and other smaller recessions subsequent to it.  Additionally in the past, cultural traditions held that generally the male of the family was the income earner, and the female stayed at home and primarily kept the household going. Males were usually in charge of the household’s finances in the global sense of the word (making investments, securing insurances, planning for retirement, etc…) and many times paid the routine household bills as well. That left the wife lacking concrete knowledge of the household’s finances and how to deal with them if the husband died, or left the household.

The reticence to approach parents or for one spouse to approach another on financial matters can cause unintended damage when the person in control of the finances begins having cognitive difficulties. 

Months and years can go by before a financial problem or crisis occurs that is large enough to raise the attention of family members outside the inner circle of power holding in financial affairs. Sometimes the damage already done is great, actually changing the options for future lifestyle choices for the persons at risk; sometimes it’s relatively small and does not change the financial future.  Sometimes one spouse “covers” for the other to the children fearing the loss of independence when the deficit is uncovered.

I suggest that children start the conversation early and keep talking to your parents often about “back up” knowledge of the parent’s global finances and occasional checking or “reconfirmation” to the day to day bill paying. This suggestion also is intended for the spouse who normally is not in charge of the finances. I say this because, in far too many of my clients’ families, the adult children had no idea of what their parent(s) finances were, and were shocked and dismayed to find that their parents had less worth than they thought.

Checking the addition/subtraction in the check book and looking at the monthly statements for large withdrawals or bounced checks on a regular basis, along with the knowledge that repeated arithmetic errors may well be indicative of a cognitive deficiency, and then being proactive about having cognition checked out thoroughly (neuropsychological testing by a psychologist) can save the entire family much heartache (and money) in the long run.

I know that these conversations are difficult. Otherwise they would have happened already.

But the conversations are far easier than trying to reconstruct or replace the money already lost. To me, the oversight is the greater good.

is a Geriatric Care Manager who specializes in helping families with Alzheimer’s and related dementias. She also trains caregivers in home care companies, assisted livings, memory care communities, and nursing homes in dementia specific techniques for best care of dementia patients. ThirdAge Services LLC, is located in Dallas, TX.

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