With holiday shopping in full swing, friends and family must be alert for financial issues with older people. Financial scams are also rising as we get closer to the holidays. If an older person falls victim to scams or has new problems with banking or paying bills, this could be the canary in the coal mine for recognizing memory disorders.

There is an emerging body of research linking problems with financial issues as an early indicator for memory disorders such as dementia. The Federal Reserve Bank of New York recently published a comprehensive report summarizing the clinical research and pointing out that problems with banking, paying bills, and financial decision-making can emerge up to five years before an actual medical diagnosis of a memory disorder. Issues with handling money and banking can often be the first signal of memory issues.

The report goes on to say that “Years prior to eventual diagnosis, average credit scores begin to weaken and payment delinquency begins to increase, overall and for mortgage and credit card accounts specifically. Credit outcomes consistently deteriorate over the quarters leading up to diagnosis. The harmful financial effects of undiagnosed memory disorders exacerbate the already substantial financial pressure households face upon diagnosis of a memory disorder.” [1]

As advisors and concerned family members, many of us may know someone who has started having issues with handling money or credit cards or seems susceptible to scams. How should we discuss this with our clients, and what should we look for?

In our practice, we encourage families and clients to plan for diminished capacity. In the following section, early symptoms of memory disorders[2] are mapped to examples of financial issues, enabling you to articulate your concerns.

1. Memory Loss

Declining memory, especially short-term memory loss, is the most common symptom. The person may forget a person or a task and the context of that task.

Examples:

• A person has meticulously paid their personal and property taxes on schedule. Now, a family member sees late payment notices.
• An elderly woman struggles to figure out a tip in a restaurant. She gives the waiter her VISA card and then gives him her PIN number so he can process his own tip.

2. Difficulty Performing Familiar Tasks

We do some tasks without thinking,  such as preparing a meal.

For example:

• Previously, a person used online banking to pay multiple bills each month. The person now misses monthly payments and sometimes will duplicate payments in one month.

3. Problems with Language

The person may forget or substitute words, making it more difficult to understand spoken and written language. They may also have trouble following a conversation.

For example:

• There could be a noticeable change in discussions around financial statements or a person becoming more withdrawn when discussing money or bills.

4. Poor or Decreased Judgement

A person with dementia may dress inappropriately for cold weather or give large gifts to someone they hardly know.

Examples:

• A client purchased a new truck a few months ago. He returned to the same dealership and, without consulting his wife, purchased another truck even though he did not need two trucks.
• An elderly, vulnerable gentleman offers a caregiver a large sum of money after he hears her son is having difficulty paying his school tuition.
• Some clients may suddenly become more interested in get-rich-quick schemes or obtaining more credit cards.

5. Problems with Concentration, Planning or Organizing

A person may have difficulty with making decisions and identifying and solving problems.

For example:

• A client takes out an unusual sum of money one day, returns a few days later, and takes out the same sum. A few days later, he does it again. When his daughter noticed the withdrawals and asked what the money was for, he mentioned he was hiding it under the rug in the living room. And sure enough, when she checked, it was there.

6. Misplacing things

Anyone can misplace their keys. However, a person with a memory disorder such as dementia will not only misplace them often but put them in an unusual place.

For example:

• A client called his sister several times in a week to say his credit card and his debit card were lost and he could not go out to lunch with his friends. After a thorough search, the cards were found in the freezer. This happened several times.

Other Early Symptoms of Memory Disorder

In addition to the illustrations above, other early symptoms of dementia include the following:

• Disorientation to time and place, such as becoming lost in familiar places and being unable to return home.
• Changes in mood and behaviour, such as rapid mood swings for no apparent reason or showing less emotion or social interaction.
• Trouble with images or spatial relationships, such as difficulty judging distance, determining colour and contrast, and seeing objects in three dimensions.
• Withdrawal from work or social activities such as becoming very passive, sleeping more than usual, and appearing to lose interest in hobbies the person previously enjoyed.

While financial institutions may have strategies to address financial issues with older people, families and advisors can set up their own early warning radar systems. The earlier the issues are identified, the sooner people can assist in following through.

Planning for the possibility of diminished capacity should be on every older person’s wish list. Appointing an Attorney for Property and having a plan with concrete steps, such as setting up automated bill payments and helping to reconcile banking information each month, will help to reduce the stress on all parties. However, we should not lose sight of the macro issue – if an older person is falling victim to scams or having new financial issues, this could be the early warning sign of memory disorder.

[1]The Financial Consequences of Undiagnosed Memory Disorders Carole Roan Gresenz, Jean M. Mitchell, Belicia Rodriguez, R. Scott Turner, and Wilbert van der Klaauw Federal Reserve Bank of New York Staff Reports, no. 1106 May 2024. https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1106.pdf?sc_lang=en Page, ii.

[2] Reference https://www.alzint.org/about/symptoms-of-dementia/