How to detect and protect seniors from financial exploitation

This article will ... Note the problems and financial dangers presented when an older relative or friend has deterioration in their mental faculties. List the warning signs of diminished mental capacity. Suggest steps to take if you detect diminished mental capacity in an elderly loved one.

Forgetfulness or diminished mental capacity: One can be troublesome; the other, financially dangerous.

In the most troubling situations, an older person with diminished mental capacity could be victimized by a financial scammer and lose their entire life savings.

However, financial problems may result even when there isn’t an exploitive situation. For instance, forgetting to cash a check for life insurance proceeds could deprive an older person of finances for ongoing living expenses. An elderly person who forgets to pay their mortgage could risk losing their home. A senior who fails to pay heating or cooling bills could risk their health and safety.

Memory issues are common with aging: Ten to 15 percent of adults older than 65 have mild cognitive impairment.

However, roughly half of these individuals are eventually diagnosed with Alzheimer’s disease or dementia within five years. Warning signs of Alzheimer’s can begin as early as 15 years before the diagnosis. (Related: The financial risk of Alzheimer’s disease)

Warning signs of diminished mental capacity

Is there anything you can to do to spot diminished mental capacity in someone you love? Here are some common signs:

The individual is unable to hold a prolonged conversation.
The individual seems confused or disoriented.
He or she seems depressed or unusually subdued.
The elderly person cannot keep up with current events or becomes confused about the day of the week or the date.
When asked about financial information, the individual shows memory lapses.
The person does not remember certain routine financial information or does not remember having conducted financial transactions.

As a family member or close friend of an older person, you may be in the best position to detect early signs of diminished mental capacity.

What to do if you see signs of diminished mental capacity?

An older person with diminished mental capacity is at greater risk of exploitation. There are steps you can take to prevent a loved one from suffering from financial harm.

The first step you can take is to talk with the elderly individual about whether you can help. Perhaps they will allow you to monitor their financial accounts. Or, they may accept your assistance with balancing their checkbook or paying bills. Other assistance you can offer includes:

Ask your loved one if he/she would be willing to meet with you and their financial professional. A trusted financial professional may be able to work with the senior client to help protect their assets.
Determine if the senior would be willing to talk with an attorney who specializes in elder legal services. An attorney can review a variety of legal tools to protect the elderly individual, such as a trust, power of attorney, medical directive or a guardianship or conservatorship. The attorney can work with the individual and their family to determine the best approach.
If the person has questions about specific accounts, encourage them to contact their financial institution.
Consider a service that adds call-blocking protections on an older person’s phone line. Service providers may offer this service for free or for a small monthly fee.

Diminished mental capacity affects millions of Americans. As a close family member or friend, you may be in the best position to spot signs of diminished capacity and protect the ones you love.