Finances and Dementia

Incapacity may signal worsening condition.

Financial capacity is essential for individuals to function independently in society. A diagnosis of cognitive impairment in general and mild cognitive impairment (MCI) and Alzheimer's disease specifically may signal financial impairment. Physicians need to recognize when older patients are losing the ability to manage their own financial affairs and should encourage them and their families to seek financial and legal advance planning.

"Declining financial capacity is a good barometer for progression of both MCI and Alzheimer's disease," said study co-author Daniel Marson, JD, PhD, director of the University of Alabama at Birmingham (UAB) Alzheimer's Disease Center (JAMA, Feb. 16, 2011). "Our previous research has shown that a decline in checkbook management skills can be a harbinger of a patient's progression from MCI to early Alzheimer's dementia. Emerging impairments in financial skills and judgment often are the first functional changes demonstrated by patients with incipient dementia."

The work by Dr. Marson and colleagues is part of "Care of the Aging Patient: From Evidence to Action," a JAMA series that provides evidence-based clinical guidance to physicians. Patients with MCI typically are able to function in the community with focal memory or other cognitive impairments but begin to show signs of functional decline.

Previous research by Dr. Marson's research team involved a tool developed at UAB called the Financial Capacity Instrument (FCI), which measures capacity across 20 tasks, including understanding a bank statement, balancing a checkbook, paying bills, preparing bills for mailing, and counting coins and currency.

The researchers now suggest that timely identification and informal assessment of financial impairment by clinicians often can lead to the establishment of effective financial protections for affected patients and limit the economic and legal hardships that often accompany financial incapacity. They offer guidance on recognizing possible impaired financial capacity and signs of financial abuse.

Families, caregivers and health care professionals should be vigilant about changes in an older patient's financial abilities to avoid potential catastrophic financial losses due to poor decision-making, fraud, and other forms of exploitation, said Dr. Marson. He and his co-authors suggest that caregivers oversee a patient's checking transactions, contact the patient's bank to detect irregularities such as bills being paid twice, or become co-signers on a checking account so joint signatures are required for checks above a certain amount. Online banking and bill payment services are additional options for families.

Dr. Marson collaborated on the study with lead author Eric Widera, MD, Veronika Steenpass, MD, and Rebecca Sudore, MD, of the Division of Geriatrics at the University of California at San Francisco.

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