Dementia also takes a toll on families' financial health

Angela Reynolds knew her mother’s memory was slipping, but she didn’t realize how bad things had gotten until she started to untangle her mom’s finances: unpaid bills, unusual cash withdrawals, and the discovery that, oddly, the mortgage on the family home had been refinanced at a higher interest rate.

Looking back, Reynolds realizes her mother was in the early stages of Alzheimer’s disease: “By the time we caught on, it was too late.”

Reynolds and her mother are among a large group of Americans grappling with the financial consequences of cognitive decline.

A growing body of research shows money problems are a possible warning sign — rather than only a product — of certain neurological disorders. This includes a 2020 study from Johns Hopkins University of more than 81,000 Medicare beneficiaries that found people with Alzheimer’s and related dementias became more likely to miss bill payments up to six years before a formal diagnosis.

Missing the Signs

One weekday in the spring of 2018, Reynolds sat next to her 77-year-old mother, Jonnie Lewis-Thorpe, in a courtroom in New Haven, Connecticut. She listened in discomfort as strangers revealed intimate details of their own finances before the judge.

She realized her family was going to have to do the same.

That’s because the family home was in foreclosure. The daughter hoped if she explained to the judge that her mother had Alzheimer’s disease, she could stop the seizure of the property.

Reynolds can’t pinpoint when Alzheimer’s crept into her mother’s life. A widow, Lewis-Thorpe had lived alone for several years and had made arrangements for her aging, including naming Reynolds her power-of-attorney agent. But Reynolds lived 450 miles away , and she wasn’t there to see her mom’s incremental decline.

It wasn’t until Reynolds began reviewing her mother’s bank statements that she realized Lewis-Thorpe — once a hospital administrator — had long been in the grip of the disease.

Dementia’s varied causes 

The cause of dementia can be one of several neurological illnesses, like Alzheimer’s or Parkinson’s, or brain damage from a stroke or head injury.

In most cases, an older adult’s dementia is progressive. The first signs are often memory slips and changes in high-level cognitive skills related to organization, impulse control, and the ability to plan. And because the causes of dementia vary, so do the financial woes it can create, said Robin Hilsabeck, a neuropsychologist at the University of Texas.

For example, with Alzheimer’s comes a shrinking of the hippocampus. That’s the catalyst for memory loss that, early on can cause a person to forget to pay their bills.

Lewy body dementia is marked by fluctuating cognition: A person veers from very sharp to extremely confused in a short period of time. 

And people with vascular dementia often run into issues with planning, processing and judgment, making them easier to defraud.

For many people older than 65, mild cognitive impairment, or MCI, can be a precursor to dementia. But even people with MCI who don’t develop dementia are vulnerable.

And some mistakes are irreversible. Despite Reynolds’ efforts, the bank foreclosed on the family home in the fall of 2018.

Property records show that Lewis-Thorpe and her husband bought the two-bedroom Cape Cod for $20,000 in 1966. Theirs was one of the first Black families in their New Haven neighborhood. Lewis-Thorpe had planned to pass this piece of generational wealth on to her daughters.

Instead, U.S. Bank now owns the property. A 2021 tax assessment lists its value as $203,900. 

Financial protections are few 

Jason Karlawish, a specialist in geriatrics and memory care at the University of Pennsylvania’s Penn Memory Center says he often sees patients who are navigating financial disasters. What he doesn’t see are changes in banking that would mitigate the risks.

But the financial industry is hesitant to act — partly out of fear of getting sued by clients.

2018’s Senior Safe Act , the most recent major federal legislation to address elder wealth management, attempts to address this reticence. It gives immunity to financial institutions in civil and administrative proceedings stemming from employees reporting possible exploitation of a senior.

Some see is as a lackluster law because the act makes training staff optional.

One corner of the financial industry that has made modest progress is the brokerage sector, which concerns the buying and selling of securities, such as stocks and bonds. Since 2018, the Financial Industry Regulatory Authority —  which writes and enforces rules for brokerage firms — has required agents to make a reasonable effort to get clients to name a “ trusted contact.”

A trusted contact is similar to the emergency contact health care providers request. They’re notified by a financial institution of concerning activity on a client’s account. But the trusted contact has no authority.

Still, a trusted contact might have alerted Reynolds.

“I fully believe that they noticed signs,” Reynolds said of her mother’s bank. “There are many withdrawals that came out of her account where we can’t account for the money. … Like, I can see the withdrawals. I can see the bills not getting paid. So where did the money go?”

This article is from a partnership that includes WESA , NPR , and KFF Health News.