When it comes to Alzheimer’s and other forms of dementia, an inability to pay bills and understand contracts are often among the first red flags—so much so that the Alzheimer’s Association officially listed confusion over credit and finances in its list of ’10 Early Warning Signs.’ Of course, a lifelong inability to manage money is a different story, but when formerly competent loved ones start to lose control of their finances, it may be time to get a doctor on the phone. This is especially critical during an economic downturn.
According to The New York Times, the financial and legal industries have grown concerned enough about questions of mental competence among their clients that they’ve met with The Alzheimer’s Association to draw up guidelines — which is turning out to be a challenging job. Is a person with dementia legally responsible for decisions? Where’s the line between respecting an autonomous client’s wishes and irresponsibly executing the desires of someone with limited capacity? (More on Time.com: Cover Story: Alzheimer’s Unlocked)
Financial firms are in “a dicey situation” if they have to decide whether a client can make major decisions about finances or future plans, said John M. Gannon, senior vice president for investor education with the financial regulatory agency. “Even doctors can have trouble figuring that out,” he said.
For lawyers, the main question is at what point a client lacks the capacity to execute a will or other document, and who decides when that point has been reached. And if a lawyer lets a client go ahead, will the document be challenged?
As the population ages, these issues are not going away. Currently, 5.3 million Americans have Alzheimer’s, and the average 65-year-old — of whom there will be more and more among the Baby Boom cohort — has a 10% chance of developing the disease. Last year, Fidelity Investments conducted a survey of 350 advisers and fully 84% reported that they had clients whom they suspected of having Alzheimer’s Disease. But 50% said they did not feel comfortable bringing up dementia in conversation with these clients and 96% felt unprepared to handle a client with diminished mental capacity. (More on Time.com: Photos: My Aging Father’s Decline: A Son’s Photo Journal)
As always, it’s up to younger family members to run interference for older ones. Alzheimer’s takes enough from its victims; it shouldn’t take their wealth too.
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