Why Aging Parents With Memory Loss Must Stop Managing Money

A new study published in the New York Times demonstrates some startling findings about loss of ability to make money decisions in older people. The study approaches the issue by looking at debt accumulation and reduced credit scores in elders long before being diagnosed with Alzheimer’s disease or related dementias. The team of economists and medical experts looked the combination of Medicare records and data from the credit bureau, Equifax. Their research was comprehensive, extensive and credible. They found that people fall behind in paying their normal debts like mortgages and credit card bills as much as five years before a diagnosis of dementia occurs.

The study demonstrates findings similar to research done over many years by experts in other fields. Among them, Daniel Marson, J.D., Ph.D. professor of neurology at the University of Alabama at Birmingham. He had studied the effect of declining cognition on financial decision-making for decades and has published extensively on this. Some of his findings are summarized in my book, Working With Aging Clients, A Guide For Legal, Business and Financial Professionals, published by the American Bar Association. My effort was to wake up my fellow attorneys and others dealing with elders to look carefully for the subtle signs of decline in their clients. They need to understand that loss of financial decision-making capacity is the first ability to be adversely affected. Lawyers can be in position to advise families about what protective steps to take with legal documents. Financial professionals need to understand that financial capacity declines very early as dementia develops.