Sometimes the first indication that something is amiss in an older person’s life is difficulty handling personal finances. Checks may suddenly start bouncing. A letter may come from the utility company threatening to turn off the electricity because bills haven’t been paid. Previously sophisticated and successful investors may suddenly make uncharacteristically risky and ill-advised stock trades. Another very common and serious scenario is an older person being taken advantage of by a scammers intended to fleece them out of hard earned retirement saving.
Why does this occur? While sometimes difficulty managing personal finances can signify the early stages of Alzheimer’s or other Dementias, this is not always the case. Recent research suggest that normal aging can cause changes in the brain that can affect judgment, trust, and risk perception. Also, There are many treatable conditions that can affect reasoning and financial literacy. These range from thyroid disorders to the mental side effect of drugs.
That’s one of the many important reasons why an older person beginning to exhibit difficulty in managing personal finances be formally evaluated – to make sure that a treatable condition is not being missed.
But let’s say your loved one is found instead to have a progressive condition that is causing this difficulty. While that’s certainly hard to come to grips with, there’s still a lot you can to make sure you or your loved one is protected. This includes making sure a variety of legal documents have been created to protect them. In addition to conventional and living wills (also known as advanced directives) this should include a legal power of attorney that enables someone to make financial decisions should you or your loved one become truly incapable of paying bills and handling more complex financial matters.
Older people in this situation are also unusually susceptible to fraud and other forms of exploitation. Often family members learn this far too late, sometimes after retirement savings has been decimated. Awareness of this vulnerability enable you to keep a respectful eye on things.
By putting some simple safeguards in place, you can avoid lots of headaches when it comes to handling personal finances.