Financial skills can erode before dementia is even suspected

MarsonWhen Mom begins to mislay her car keys, or Dad misses bathing for a couple of days, many of us realize that it might be time to take at peek at their finances to make sure nothing has gone awry.

However, this could be much too late. According to a couple of recent studies, patients with mild memory problems may already be exhibiting signs of financial impairment, putting their assets at risk.

I had the chance to talk in a telephone interview with one the field's foremost experts on Alzheimer's and financial behavior, Dr. Daniel Marson J.D., Ph.D., professor and director of the Alzheimer's Disease Center in the Department of Neurology at the University of Alabama at Birmingham, who recently completed a new study on this topic.



What key piece of information should people consider when dealing with cognitive impairment and personal finance?

When you're dealing with an elderly person who is beginning to show memory loss, the memory loss and ability to express themselves are important in what might be developing dementia, but the real face of dementia is when functional changes occur. You can put up with senior moments of memory lapses, but when someone is beginning to break down in using the checkbook, paying bill two or three times, or getting exploited through get-rich schemes, you have to step in. That is often really the first indicator for families that they are dealing with dementia and that there is a disability now, forcing them to engage and provide care and oversight that they didn't have to before.

What did your new study find?

We've been interested in financial capacity as a set of skills in the elderly since the mid-1990s. We've found that financial skills are considerably impaired in mild Alzheimer's Disease and in advanced impairment when patients move to the moderate level of A.D.

In this study we took a group of people with mild cognitive impairment, which is not Alzheimer's Disease by definition yet but is a condition of abnormal memory loss that puts this group at risk for progressing to A.D. Those who indeed did progress and convert to A.D. over the course of a year showed detectable changes in their ability to do more complex financial tasks.

If you have someone who already has abnormal memory loss and may be at risk for developing a dementia in the future, and begin to see interval changes or changes from a prior baseline in their ability to manage different financial tasks it may be a harbinger that they will be progressing to A.D.

In an earlier study, we found that patients with mild cognitive impairment already have some subtle but detectable changes in their financial skills. (The current) study shows that those who are progressing show changes over time that is detectable.

How do you measure a decline in financial capability?

The Financial Capability Instrument is a test we developed in the 1990s as a research instrument that would tap a wide range of skills such as naming and counting currency, paying bills, making simple investment decisions, and navigating bank statements.

You can look at very different skills and some ...may be changing in mild cognitive impairment and some may not. For example, the ability to name money or count currency is not going to be affected in MCI (mild cognitive impairment). Some of the very complex skills may show changes as early as MCI, though.

An earlier study that you participated in called into question the ability of caregivers to accurately evaluate a patient's financial ability. Could you speak to that?

"The Wadley Study in 2003 showed that by the time you have early Alzheimer's Disease your ability to self-appraise your financial functioning has become very poor. These people almost always overestimate their abilities, think that they are able to do much more than they are able to do.

Caregiver and family reports are very important... but their reports are often biased. They can be in denial because they don't want to admit Dad is slipping, or sometimes they overestimate the impairment because they are so torn up. Problems with the reliability of caregiver reports makes it important to consider other approaches to measuring financial skills.

What would you suggest to someone who is dealing with mild cognitive impairment?

Physicians need to be mindful as they treat someone with mild cognitive impairment to possible changes in financial skills as an indication of a progression toward dementia....Most physicians are not able to do a financial capacity assessment, but they can ask patients if they are still handling the checkbook OK, or engaging in risky behaviors they didn't before.

If it comes down to issues of financial capacity or they need a more finely grained exam they can refer the patient to a specialist who can do a financial capability evaluation. Neuropsychologists can look not just at their memory function or thinking ability, but how well they are functioning in certain important domains such as financial skills.
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From my talk with Dr. Marson and review of some of his studies I took away these bullet points:
  • In the early stages of cognitive impairment, people can start making financial mistakes before they exhibit other symptoms that their doctor or loved ones might recognize.
  • As the disease progresses, so does the erosion of financial ability, and this can be measured.
  • People with this problem commonly don't recognize that they are slipping.
  • Caregivers understandably have trouble accurately judging the patient's financial disability.
It's hard to ask the parents detailed questions about their finances and capabilities, but these studies tell me that waiting until impairments are obvious puts them at risk. Don't be afraid to ask for help from others who are emotionally uninvolved and can objectively evaluate the situation.

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