Dementia and Money Management for Caregivers

Learn the warning signs that your loved one’s ability to manage money is compromised, and steps a family member or family caregiver can take to provide protection.

On February 22, 2017, the Washington Post reported the conviction of individuals scamming several Montgomery County, Maryland elderly adults of over $100,000 for home repairs, and yard and tree clearing services that never happened.

Because the victims were confused or forgetful enough about what work they had already paid for, the scammers were able to keep returning to their victim’s homes, knock on their doors, and convince them their homes needed more work. In fact, the work was not needed, but the elderly individuals, trusting and believing the scammers, continued to pay for more work, and ended up paying over $100,000 before some savvy adult children caught on to the scams and contacted the police.

These events—of financial abuse, and specifically the scamming of unsuspecting and trusting older persons with dementia—occur too frequently. Such occurrences will reduce or even eliminate the life savings of unsuspecting elders. Those with dementia are at greater risk of financial abuse than the general population. Over time, they increasingly have trouble with the many tasks involved in managing money.

Let’s look at the warning signs a person with dementia might present that suggest their ability to manage money is compromised, as well as the steps a caregiver can take to provide protection for them.

Difficulty Managing Money—The Warning Signs

Depending on your relationship and proximity to your loved one, their struggles in managing money might be the first sign you notice of any problem at all. Some specific signs of difficulty with money management can include:

• Difficulty determining change or paying for a purchase
• Difficulty balancing a checkbook, or having an overdrawn account
• Forgetting to pay their regular bills
• Forgetting where they put their cash
• Unusual charges on a credit card bill, or unusual merchandise in the home
• A pile of mail with overdue bills

Early in the disease process the ability to manage the simpler tasks of money management (i.e. making change or paying for a purchase) may be intact. As time goes on, however, even the simpler tasks become too hard. The more complex tasks of managing money, such as balancing a checkbook or making investment decisions, are difficult earlier in the disease process.

You are Your Loved One’s Protector

If you discover your loved one is unable to manage their money, what can you do to put safeguards in place to assist and protect them, and their finances? Some immediate measures include:

• Add a co-signer to their bank accounts, which will make bill paying and purchases easier to accomplish.
• Automate bill paying where possible. This will ensure bills are paid on time.
• If it gives them some comfort, provide a small amount of money they can carry in their wallet or purse.
• If they are able and interested, include your loved one in the bill paying process.

The U.S. Administration on Aging, in their 2015 report “Identifying and Meeting the Needs of Individuals with Dementia Who Live Alone” identifies additional steps a family member or family caregiver should take to protect one from financial exploitation:

• Limit credit card access.
• Inform bank tellers of their difficulty with financial transactions, and establish an alert system for withdrawals.
• Review their credit report yearly, at a minimum.
• Remove the social security number from checks, if needed.
• Set up a post office box for mail.
• Remove your loved one’s name from telemarketer lists.

Lastly, the larger action steps are legal and financial. As each state has specific laws, be sure to consult with an attorney in your loved one’s state to understand what legal steps are needed to protect your loved one and their financial assets.

One such document can be a power of attorney for finances. This document gives the designated person the authority to make legal and financial decisions for the one with dementia. It will be needed over the long term to protect the finances of one with dementia.