Tuesday, March 11, 2008
Patients with mild Alzheimer’s disease have a dramatic decline in their ability to manage their finances and make sound financial decisions. The declines may be rapid over a one-year period. The findings, published online in the American Journal of Psychiatry, have strong implications for caregivers and health care providers in the areas of estate planning and fraud prevention.
Researchers at the University of Alabama compared 55 patients with mild Alzheimer’s disease against 63 healthy older adults and followed them for one year. At the beginning of the trial, those with mild Alzheimer’s disease already showed a financial capacity of 80 percent of the capacity of healthy older adults. By the end of the year, those with Alzheimer’s had dropped another 10 percent in their ability to manage finances, equivalent to 70 percent of the capacity of the healthy group.
“After just one year, the mild Alzheimer’s disease group had dropped to 70 percent of the financial capacity demonstrated by the healthy older adult group,” said the study’s lead author, Daniel Marson, J.D., Ph.D., director of the University of Alabama Alzheimer’s Disease Center in the Department of Neurology.
Patients were assessed on a variety of financial skills, including basic monetary skills, checkbook management, bill payment and understanding a bank statement. Tasks varied from simple ones such as identifying specific coins and currency to complex ones such as preparing bills, checks and envelopes for mailing.
Men and women with Alzheimer’s disease showed substantial declines in overall financial capacity on eight of the nine financial domains and on 12 of the 18 financial tasks. Of particular concern was a decline in the ability to recognize telephone or mail fraud.
“Elder fraud is a serious problem, and our findings suggest that even patients with mild Alzheimer’s are at significantly increased risk for becoming victims of fraud,” Dr. Marson said.
Overall, the study found that impairment in financial skills occurs early in Alzheimer’s disease and progresses relatively rapidly over time. Deficits include declines in basic judgment and monetary calculation skills.
The findings underscore the importance of making sure that patients with Alzheimer’s and their families promptly pursue financial planning and transfer financial responsibilities at the time of diagnosis, Dr. Marson said.
Proactive steps by families include finalizing trust and estate arrangements, delegating financial decision-making powers, planning for eventual financial incapacity, and providing increased supervision of existing financial activities. The research was supported by grants from the National Institute on Aging and the National Institute of Mental Health, part of the National Institutes of Health.
For further caregiving tips, visit http://www.ALZinfo.org, The Alzheimer’s Information Site.
By http://www.ALZinfo.org, The Alzheimer’s Information Site. Reviewed by William J. Netzer, Ph.D., Fisher Center for Alzheimer’s Research Foundation at The Rockefeller University.
University of Alabama.
Roy Martin, H. Randall Griffith, Katherine Belue, Lindy Harrell, Edward Zamrini, Britt Anderson, Alfred Bartolucci, and Daniel Marson: “Declining Financial Capacity in Patients With Mild Alzheimer Disease: A One-Year Longitudinal Study.” American Journal of Geriatric Psychiatry. Published March, 2008.
A Power of Attorney is one of the most important legal documents a
person can have. Without a comprehensive power of attorney, many
people are neither able to handle their loved ones’ financial
matters nor make health care decisions without seeking court
intervention (Guardianship and/or Conservatorship).
We often have clients come into our office assuming that, just
because their assets are titled jointly with their spouse, parent
or partner, they are able to liquidate accounts to pay bills,
hire attorneys, sell their jointly titled real estate, etc.
Unfortunately, that isn’t that case. In fact we frequently see
clients how have failed to put in place properly drafted Power of
Attorney documents allowing them to act.
And now, their loved on has developed dementia or
is incapacitated in some other manner, an
can no longer legally create a Power of Attorney document (a person
must have capacity to sign legal documents).
We have to tell those
people that in many cases, in order to handle the financial affairs
and medical decision making of their loved one,
A Guardianship (also called a Conservatorship in some states) is
What is a Power of Attorney?
A power of attorney is a legal document where one person (the
principal) authorizes another (the agent) to act on their behalf.
There are financial powers of attorney which allow your agent to
make decisions regarding your property and healthcare powers of
attorney which allow your agent to make decisions regarding your
health care needs. NOTE: They go by different names in different
states such as Medical Power of Attorney, Health Care Power of
Attorney, Advance Directive etc.
Your power of attorney can be broad in scope, giving your agent the
ability to make any and all financial and personal decisions for
you (a General Power of Attorney) or you can limit your agents
authority by specifying the types of decisions you would like them
to make on your behalf (a Limited Power of Attorney).
You also have a choice whether you would like your agent to have
the ability to make decisions both now and if you become
incompetent (a Durable Power of Attorney) or your agent can be
limited to make decisions only when you become incompetent (a
Springing Power of Attorney).
One of the most important things a family facing Alzheimer’s can do is immediately have properly drafted power of attorney documents put in place. Make sure they contain provision that allow the agent to engage in gifting and other types of benefits planning in the event someone needs Medicaid. All too often, general power of attorney documents do not contain the right language and an agent may not be allowed to engage in Medicaid planning.
Thanks guys –
I have been acting for the past two years under the apparently inaccurate assumption that because we were married I had power to manage affairs of my wife when she became unable to do so. We even got re-married recently with me thinking this would make things simpler. Now I see – not necessarily so. I Do have copies of an Advance Directive form which I guess I had better get busy completing and submitting to our health care provider at least. Also I’m pretty sure that I had better see about “conservatorship” as well.
Argued in a court of law I suppose that our divorce, our recent “re-marriage” and even our Rental Lease Agreement signed last year could be shown to be invalid. Yikes! What a mess.
Sorry to hear about all your troubles. You definitely may need to pursue a conservatorship. Unfortunately, marriage alone is not enough. Each person is presumed that they can act on their own as an adult and if they lack the mental capacity to do so, someone can step in and act for them either by having been named agent under a durable power of attorney (before the person loss mental capacity) or through a court ordered guardianship/conservatorship.
See a good elder law attorney and ask them first if there are any less burdensome alternatives to a conservatorship or guardianship.
Yes Please read LEGAL AND FINANCIAL PLANNING post Oct 28. Also thanks for the comments. HUGS! Marcus
First thing I did after dx was get POA done.No worries here……..
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