Knowing when someone you love needs your help can be difficult to determine. But when a loved one suffers from dementia, waiting too long to offer a helping hand can have devastating financial consequences.
In many cases, dementia comes on slowly and by the time a family acts, bill payments have already been missed, taxes have gone unpaid and money may have started going unaccounted for.
Of course, it's important to prevent any of this from happening. But how can you tell if someone is suffering from dementia? Here are four financial-related warning signs that can signal diminishing capacity.
One of the first things to pay attention to is to whether someone is having trouble with their routine financial tasks, such as paying bills or filing taxes, says Angie O'Leary, head of wealth planning at RBC.
“If someone is having difficulty paying bills or paying for the wrong month or getting phone calls about it, then that's a sign," she says. “We've seen situations where someone sends a check to the wrong person. It's about having the ability to do these tasks in the right sequence."
Other things to watch out for include a piling up of unopened mail, late notices, late fees that haven't been seen before and even bills being paid twice.
As someone gets older, it's a good idea to designate another person, such as a child or a “trusted contact" – a specific person who can speak with an advisor if someone can't talk for themselves. Unlike a power of attorney, a trusted contact can't control any finances. Their role is simply to look out for their family member.
“As you age, you might need someone to have a watchful eye over what's going on," says O'Leary.
Too many requests
Another sign of cognitive impairment is repeated or unusual requests for the same information. That could be asking a bank over and over again for banking information or making multiple calls to other companies to inquire about a bill.
Frequent Internet password resets can also be problematic, says O'Leary. While many of us forget our passwords regularly, people with an onset of dementia would be having even more trouble remembering login information than we would.
“I do that a lot, but it's different if you see someone doing it two or three times a day," she says. “Or maybe they're getting passwords and user IDs confused between different financial institutions."
Also keep an eye on whether your family member is having trouble making basic decisions or needs repetitive explanations on simple topics. Suddenly becoming difficult to reach, or having been denied access to their money, is a cause for concern, too.
An unexpected change in one's relationships is also a red flag – and it's a common one among people suffering from dementia. On the financial side, if a loved one suddenly fires their advisor, or is discussing financial matters with a new “friend," then that's reason to worry.
Watch for unexplained changes to any financial accounts, including new mailing addresses or new passwords it, says O'Leary. This could be a sign that the person is being taken advantage of.
“This is where you're getting into protecting them from financial scams," she says. “We all get phone calls saying someone needs a password to a bank account, but people with dementia can't rationalize that the person may not really be in trouble."
Also watch out for any new or unusual charitable giving or odd email activity related to one's finances.
In some cases, the person doing the scamming isn't a stranger. It can be caregiver or even an ill-intentioned child. It's tough to figure out that someone is being taken advantage of by a person close to them, which is why everyone – advisors and family members – needs to be diligent.
“We've seen where all the sudden there's a new family member or new best friend in the client's relationship," says O'Leary. “Sometimes it's the caregiver or someone coming into someone's home who doesn't have your family member's best interest in mind."
Financial institutions do have a duty to protect vulnerable client. If they see something out of the ordinary, like that friend trying to deplete a bank account, then the institution will report it to the family.
A change in risk profile
One's investment risk rarely changes in old age, so if a loved one with a conservative portfolio says to an advisor that they want to go all in on stocks, or buy some unusual company, then that could be a warning sign.
Poor judgment, an unexplained interest in riskier investments, a sudden interest in day trading are all red flags, says O'Leary. However, so too is a lack of activity or a disinterest in one's finances – maybe your family member did have an interest in stocks and now doesn't.
“They might call and say they met a guy who's going to sell them water rights of Lake Michigan," says O'Leary. “That's the kind of thing that the financial advisor or the person at home who's paying attention might see. It's about a sudden change in behavior."
On their own, none of these things may seem all that troubling – people forget passwords, they often have a stock they think about buying at some point – but it's when you start to see a pattern that you may need to take action.
Ask question, try and find out why someone is doing what they're doing and if it can't be explained then start safe guarding their finances, says O'Leary. Talk to their advisor, ensure bills are getting paid and make sure your loved one is not getting themselves into financial problems.
“The sooner you can identify this the better," she says. “Since these are higher order brain functions, they are some of the first signs that someone may be suffering from dementia. (As a family member), you really need to look for it and think about."
Access our full report about dementia, the real costs of care and how you can take action.