By Michelle Andrews,
Kaiser Health News
After Maria Turner’s minivan was totaled in a crash a dozen years ago, she grew impatient waiting for the insurance company to process the claim.
One night, she saw a red pickup truck on eBay for $20,000. She thought it was just what she needed. She clicked “buy it now” and went to bed. The next morning, she got an email about arranging delivery. Only then did she remember what she’d done.
Making such a big purchase with no forethought and then forgetting about it was completely out of character for Turner, then a critical care nurse in Greenville, South Carolina. Although she was able to back out of the deal without financial consequences, the experience scared her.
“I made a joke out of it,” Turner said, “but it really disturbed me.”
It didn’t stop her, though. She shopped impulsively online with her credit card, buying dozens of pairs of shoes, hospital scrubs and garden gnomes. When boxes arrived, she didn’t remember ordering them.
Six years passed before Turner, now 53, got a medical explanation for her spending binges, headaches and memory lapses: Doctors told her that imaging of her brain showed all the hallmarks of chronic traumatic encephalopathy, or CTE, a degenerative brain disease. Her doctors now also see evidence of Alzheimer’s disease and frontotemporal dementia, which affects the frontal and temporal lobes of the brain. These may have roots in her CTE.
Turner’s money troubles aren’t unusual among people who are beginning to experience cognitive declines. Long before they receive a dementia diagnosis, many people start losing their ability to manage their finances and make sound decisions as their memory, organizational skills and self-control falter, studies show. As people fall behind on their bills or make unwise purchases and investments, their bank balances and credit rating may take a hit.
The coronavirus pandemic, meanwhile, may have masked such early lapses during the past year, mental health experts say. Many older people have remained isolated from loved ones who might be the first to notice unpaid bills or unopened bank notices.
“That financial decision-making safety net may have been weakened,” said Carole Roan Gresenz, interim dean at Georgetown University’s School of Nursing and Health Studies, who co-authored a study examining the effect of early-stage Alzheimer’s disease on household finances.
Even during times that aren’t complicated by a global health crisis, though, families may miss the signs someone is struggling with finance, experts say — though it’s also commonly one of the first revelations that someone has cognitive decline.
Early in the disease, dementia robs people of the abilities they need to manage money, such as planning and problem solving, memory and the ability to understand context, said Beth Kallmyer, vice president for care and support at the Alzheimer’s Association.
People who live alone may be the most likely to slip through the cracks, Kallmyer said. And many adult children may be reluctant to discuss personal finances with their parents, who often guard their independence.
About 6 million Americans have Alzheimer’s disease, the most common cause of dementia. Dementia is an umbrella term for a range of conditions associated with declines in mental abilities that are severe enough to interfere with daily life. There is no cure. Alzheimer’s, which killed more than 133,000 Americans last year, is the seventh-leading cause of death in the U.S.
Many people have mild symptoms for years before they are diagnosed, which may cause them to make substantial errors managing their finances.
In Gresenz’s study, researchers linked data from Medicare claims from 1992 to 2014 with results from the federally funded Health and Retirement Study. Her study, published in the journal Health Economics in 2019, found that during early-stage Alzheimer’s, people were up to 27% more likely than cognitively healthy people to experience a large decline in their liquid assets, such as savings and checking accounts, stocks and bonds.
Another study, published in JAMA Internal Medicine in November, linked Medicare claims data to the Federal Reserve Bank of New York/Equifax Consumer Credit Panel to track people’s credit card payments and credit scores. The study found that people with Alzheimer’s and related dementias were more likely to miss bill payments up to six years before they were diagnosed than were people who were never diagnosed. The researchers also noted that the people later diagnosed with dementia started to show subprime credit scores 2.5 years before the others.
Turner, who has two adult children, lives alone. After her diagnosis, she hired a financial manager. Together, they set up a system that provides Turner with a set amount of spending money every month and doesn’t allow her to make large withdrawals on impulse. She ditched her credit cards and removed eBay and Amazon from her phone.
Turner’s financial adviser keeps an eye on her spending and questions her when something seems off.
Solutions to these problems, though, will depend on each family and its specific financial situation. Still, her are some suggestions:
Encourage the parent in need of help to sign a financial power of attorney.
These legal documents authorize you or another person to act on a parent’s behalf in financial matters. The terms may be narrow or broad, allowing you to make all financial decisions or to perform specific duties like paying bills, making account transfers or filing taxes.
A “durable” power of attorney allows you to make decisions even if your parent becomes incapacitated. In some states, power of attorney documents are automatically considered durable.
Put assets in a trust.
A trust is a legal vehicle that can hold a range of assets and property. It can spell out how those assets are managed and distributed while people are alive or after they die.
Trusts can be tailored to a client’s concerns and provide more guidance than a power of attorney document about what money can be spent on and who has access under what circumstances.
You might be a co-trustee on major distributions, for example, or there may be rules that provide for you or others to review and be notified of any changes.
The Alzheimer’s Association recommends working with an attorney who specializes in trusts to ensure all laws and regulations are followed, Kallmyer said.
Have your name added as a user on a parent’s bank accounts, credit cards or other financial accounts.
This may be a convenient way to make payments or monitor activity. But a shared account can be problematic if children are sued, for example, or wish to withdraw the money for their own use.
The funds typically belong to all parties whose names are on the account. Unlike a power of attorney, the child isn’t obligated to act in a parent’s best interest.
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
Source: Orange County Register