Seniors and Financial Decline
Uncomfortable, Yet Essential Discussion
Finances can be an uncomfortable topic for even close-knit families to talk about. However, it’s almost always a part of the conversation when considering moving into a senior living community. While our community at Highgate Senior Living can be a solution to managing financial decline, it can still be awkward when you’re talking to a parent about the ability to continue managing his or her own money.
The idea, “I’m no longer capable,” can make any parent prickly! That’s why being proactive is so much better than waiting for serious money management problems to arise.
As a New York Times article on this topic warns, math skills can be the first to go as early dementia creeps in. It sets a senior up for being cheated. Even those who don’t decline in math skills may find the decision process more taxing than it once was. They find the array of choices confusing.[i]
For example, Beatrice Routlidge—a woman in her mid 70s—was known for her financial savvy. She had worked as a tax specialist and managed money extremely well. Yet, she signed an agreement to have features added to a used car she was buying that just a few years before she would never have agreed to. When she went back to pick up her car—this time with a family friend along—her friend was shocked. Routlidge had no idea she had agreed to over $700 worth of optional add-ons, but she meekly paid the bill, “because I can see I signed the contract.”
Routlidge’s family weren’t aware of the warning signs of financial decline. The car incident was just the last decision in a list of costly choices she made over the span of three years.
How do you tell when a person you care about has switched from financially competent to a person at risk? It isn’t easy. However if you watch carefully, there are trends.
- The ability to grasp financial concepts slips.
- The facility for identifying risks slides.
- The focus on details in the small print diminishes.
- The power to do simple math problems declines.
- The speed of handling routine financial tasks slows down.
- The details of larger financial transactions aren’t retained.
The bottom line is this. If the task has been easy in the past, it still should be. If it isn’t, it’s time for a discussion.
A New York Times article highlights several major risks for seniors suffering from cognitive decline. Their declining financial abilities make them easy to exploit—just as Routlidge was.
The article tells of Francis Taylor, who remarried at 80. His wife was 17 years younger. The 63-year old proceeded to empty his $123,000 annuity over the next three years before leaving him once the money was gone. His family was unable to intervene because they didn’t know there was a way to do so. They weren’t aware that senior financial abuse is illegal.
It’s best when seniors are educated before their abilities decline so they can plan ways to protect themselves. However, family members can intervene as a person’s memory declines by emphasizing some simple rules:
- Never sign papers you don’t understand.
- Never ignore it if someone takes money or property without asking first.
- Never share your personal information with someone who calls you over the phone.
- Never share personal or financial information through a link found in an email.
- Never share your pin.
- Never share your social security number.
If it’s too late for your loved one to apply these rules, you must ask yourself, “Is allowing a senior to be abused financially better than making ‘trouble?’” If one family member is taking advantage of the financial decline of another, it’s time to act.
It’s not uncommon for both the person who is being abused, and the person who sees the abuse taking place, to be afraid of the abuser. That’s when it’s wise to report the issue to the police. Whistleblowers do not have to reveal their identities. They just have to provide enough details to warrant a police investigation.
In addition, it’s important to report to Adult Protective Services (APS). This agency is often the asked to check into suspected senior abuse as a precursor to the police following up. By reporting to APS, you are ensuring there is as little delay as possible before your loved one is given the assistance and protection they need.
Once most people hit their mid 50s, their cognitive strength rarely exceeds that of the day before. Thus most experts suggest seniors start simplifying their financial lives in their 60s, especially if there is a family history of senile dementia.
Highgate Senior Living encourages you to start the conversation about future needs as your loved ones transition into retirement. You will not hasten the need for financial intervention by doing so. Rather you may prevent the need for financial triage.
When you join our Highgate Senior Living community, we’ll discuss the following legal tools as a way to ensure money is managed in the way most beneficial to the senior.
- Financial power of attorney. This gives someone else power to review decisions.
- Living Trust. This allows a senior to continue benefiting from assets, and then to transfer the balance to a chosen representative. The trust is usually revocable.
At Highgate Senior Living, we recognize that the healthy lifestyle we promote isn’t a panacea that prevents financial decline, even if It may help to slow it. Providing support to our senior living community through the stages of financial decline is something we value. Our goal is to ensure we’re part of the solution families can explore so finances are properly managed to the best benefit of each resident.