At a recent continuing education seminar I had the opportunity to hear UAB neurology professor Dr. Daniel C. Marson, J.D, Ph.D. talk about his research into diminishing financial capacity in the elderly. My overall takeaway was that a much of Dr. Marson’s research seems to confirm the experiences of many of the elder law attorneys who were in attendance that difficulty handling ones finances can be an early indicator of Alzheimer’s and dementia in the elderly.
One of the problems with diminishing capacity in the elderly is that the is no clear litmus test to determine when they have become incapacitated. Even a medical diagnosis of Alzheimer’s or dementia does not mean that a patient has lost their mental capacity in a legal sense. To the contrary, the law presumes all adults to be competent until proven otherwise by a court of law.
That being said, the research discussed by Dr. Marson appears to confirm what may already suspect—that difficulty with financial transactions and arithmetic may be an early indicator of Alzheimer’s and dementia. In fact, current research indicates a high correlation between the elderly’s ability to handle their everyday finances, and their success in living independently.
But when it comes to diminishing financial capacity in the elderly, Dr. Marson provided the following examples of some warning signs to look for:
Warning Signs in Money Matters:
Memory Lapses—forgetting to pay bills, or paying a bill more than once.
Disorganized—problems keeping track of finances and bills.
Math Mistakes—math and counting errors in everyday life.
Confusion—difficulty understanding basic financial terms.
Impaired Judgment—new interest in “get rich quick” schemes.
Determining if and when an elderly person has lost the capacity to handle their finances is a difficult question. It may require uncomfortable conversations between adult children and their parents, and parents may resent their children “prying” into their affairs. But the consequences can be severe, as an article published in The New York Times, Money Woes Can Be Early Clue to Alzheimer’sdemonstrates. The article, (which quotes Dr. Marson’s research) tells the story of how Renee Packel learned that she and her husband Arthur, a former attorney, were nearly penniless:
It turned out that Mr. Packel was developing Alzheimer’s disease and had forgotten how to handle money. When she tried to pay their bills, Mrs. Packel, who enlisted the help of a forensic accountant, could not find most of the couple’s money.
“It just disappeared,” she said.
As the population continues to live longer, our society will need to be more cognizant of the problems that arise when the elderly—who control about 35% of all the household wealth in the United States—begin to have problems managing their finances. While researchers like Dr. Marson are improving our understanding of diminishing capacity, no simple test of financial capacity currently exists.
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