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Dementia and its impact on financial health

Money troubles are typical among people who are beginning to experience cognitive declines. Studies show that many people start losing the ability to manage finances and make sound decisions as their memory, organizational skills and self-control falter long before they receive a dementia diagnosis.  Unfortunately, banks are slow to introduce guidelines that protect the older generations from these issues. In light of that, there are some things that can be done to protect our loved ones from themselves.

Banks are slow to help
Some credit unions and community banks have taken steps to protect older customers including staff training and improvements to fraud detection software. However, the industry is hesitant to do more because of liability. Banks are concerned that they might get sued if they intervene when no financial abuse has occurred, or a customer’s transactions were benign. A trusted contact program that notifies a family member of any concerns is a good idea, but they have some logistical challenges.

Tips for helping a loved one
Make a plan with your loved one before there is any indication of dementia.
Encourage your loved one to sign a financial power of attorney
Have your name added as another user on a parent’s bank accounts, credit cards, or other financial accounts
There is a fine line between protecting a loved one and seizing access to their financial accounts. Ultimately, the only way to have full access to all financial accounts is to file for a conservatorship or guardianship. This is a serious and lengthy process that should not be taken lightly.

Learn more about dementia and financial issues here.