Gradual loss of control in the elderly

A pair of articles were published recently about a subtle threat to the financial well-being of older clients.

At a website called Seeking Alpha - The Biggest Threat to Your Retirement Portfolio: Mild Dementia
In the New York Times - As Cognition Slips, Financial Skills Are Often the First to Go

The articles recommend that adult children, agents, or other protectors of elderly parents help with monitoring their accounts and transactions to look for early signs of mismanagement of funds, sending money to inappropriate recipients, and the like.

"People are able to make these disastrous investing decisions in the earliest stages of dementia because their loved ones, who assume dementia announces itself with forgetfulness, don't realize there are quite a few syndromes that develop into dementia whose first symptoms are not forgetfulness, but are instead loss of judgment, impulse control, and emotional balance."

Recommendations include:

• Sign authorization forms, well in advance, to allow your doctors to discuss your medical issues with your children or other selected agents.
• Include language in powers of attorney, trust agreements, and other substitution documents to permit a doctor to use "signs of poor judgment" or loss of emotional control to justify a declaration that you should not be handling your own finances.
• Share information about your portfolio and investment patterns with your agent, and give him or her access to be able to monitor activity within those accounts. 
• Place a credit freeze on the parent's accounts.
• Set up automated bill payments. 
• Ask that insurance companies and other regular payees send duplicate notices to your agent so that he or she can be notified of a missed premium payment or other similar lapse.
• Give early authorization to your attorneys and financial advisers to contact your agent if they see anything that gives cause for concern.

Each of these, of course, requires a careful balance between maintaining control and privacy and enabling a substitute decision-maker to effectively protect your interests.