I remember the doctor’s appointment I made for my mother when I first began questioning whether she had dementia. I sat and listened to his questions testing her cognitive loss. The questions, which I later discovered were fairly standard, were like: “Who is the President?” and “what year is it?” etc.
(I don’t recall her answer regarding the year, but I do remember that she could not recall President Obama’s name. However, she did say: “Well, I know that I don’t like him much”). Unfortunately, her answers pretty clearly established that she had dementia.
According to an April 24, 2015 New York Times article, answers to such standardized questions are less revealing than asking the elderly to do math-related problems, like counting backwards from “100” by the number “7.” The fact that math and abstract concepts are the “first to go” is not good news from a financial and estate planning perspective. It means that an elder may be susceptible to financial abuse well before she is diagnosed with dementia. It also shows that the inability to handle finances may be the very first sign of early dementia. The elder may be a prime victim for abuse during this early period. Here is a quote from the article:
The signs, while perhaps not surprising, are subtle, making them easy to miss: It may become more difficult for people to identify the risks in a particular investment, and they may focus too much on the benefits. Completing various tasks on a financial to-do list may start to take longer, such as preparing bills for the mail. Everyday math may become more laborious or prone to errors, whether that’s figuring out a tip in a restaurant or doing a calculation that requires two steps. Financial concepts, like medical deductibles and minimum balances required in savings accounts, may also become harder to grasp. Naturally, these behaviors should represent a significant change: If a person was never adept with personal finances, this won’t serve as much of an indicator.
Obviously, all of this makes an elderly person a likely target for elder abuse. According to the article, problem solving (called, “fluid”) cognition starts declining in the 20s, but it is offset by experience-related mental abilities, until we reach our 70s. At that point, in most of us, the decline in “fluid” cognition overtakes our ability to offset the loss through experience.
Being proactive, here are some approaches to combat this:
1. Combat potential elder abuse by simplifying your financial life as you age. As you age, consolidate your accounts; keep your finances in only a few mutual funds or accounts.
2. Hire a financial adviser, estate planner and/or financial planner to assist you.
3. Be honest and proactive. Recognize the trend in your abilities, and take steps to deal with it.
4. Surround yourself with trusted people who will be able to see and respond to potential elder abuse. The article calls this a “protective tribe.”
5. Be honest. Listen to your “tribe.”
6. Prepare estate planning documents, including powers of attorney, wills and/or a living trust. Take care when appointing your agent. You should always be cautious to only appoint someone you trust to act as your executor, trustee and/or agent.
7. To repeat: Be honest when appointing your agent, executor or trustee. Be less concerned about hurting the feelings of a family member, and more concerned about appointing the best, most capable, and most honest fiduciary.