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The Financial Fallout of Cognitive Impairment

CHARLES ROTBLUT: It is critical that each person discuss the risks of cognitive decline with their aging parents. Doing so can prevent or at least catch many problems, including fraud.

Among the earliest symptoms of cognitive decline are financial problems. Awareness of this link has increased to the point that the Journal of the American Medical Association published an article guiding physicians on how to identify and assist patients with financial problems caused by impaired cognitive skills. These problems can include not paying bills on time, not balancing a checkbook or being a victim of a scam.

The best step a person with older parents can take is to simply start the conversation. Express your concerns about the risks and explain that you would like this to be an ongoing conversation. Then ask them to make a list of accounts and insurance policies easily accessible to you in the event of an emergency. (Even a file in a desk drawer can be helpful.)

How you proceed beyond this point depends on your family dynamics. Some parents will be more open to cooperation than others.

Among the more proactive steps a person can take is to periodically monitor his or her parents’ financial activities, either by directly accessing the account statements or by having ongoing conversations about how money is being spent. It can help to be listed as an account owner on your parents’ checking account, but realize that this can expose you and your parents to each other’s creditors. It can also affect the step-up basis for estate taxes and potentially cause strain with other heirs, so take this step with care.

If a parent is not cooperative or is simply less open to your help, there are still steps you can take. Periodically ask them about what they are doing and what medicines they are taking. Bring up food, either by asking about what restaurants they’ve frequented or what they’ve been cooking. The key in asking these questions is to look for changes in patterns. If there is negative change (e.g. they suggest they can’t afford to go to plays anymore), there may be a problem.

Finally, set up a pool of resources. Reach out to the branch manager of the bank where your parents hold their accounts, speak to their friends and talk to their clergy (if they are actively involved with a place of worship). Give them your contact information and let them know that you want to be alerted if a problem is perceived.

The key to all of this is not to take away any of your parents’ independence nor manage their money from them. Rather, you want to set up a system of safeguards in case something does happen and you need to be more involved. Your goal is prevention, not unnecessary intervention.


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