Skip to main content
The Globe and Mail
Get full access to globeandmail.com
Support quality journalism
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
The Globe and Mail
Support quality journalism
Get full access to globeandmail.com
Globe and Mail website displayed on various devices
Just$1.99
per week
for the first 24 weeks

var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){console.log("scroll");var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))}pencilInit(".js-sub-pencil",!1);

It's a sad, sticky and increasingly common situation in the U.S.: An elderly relative insists on managing his money, but you suspect he's losing his ability to handle that.

The older Americans get, the more likely they are to suffer cognitive decline. Roughly 14 per cent of people over 71 have some level of dementia, according to the National Institutes of Health, a part of the U.S. Department of Health and Human Services. For those in their 90s, the rate rises to 37.4 per cent.

Many older folks have spent a lifetime managing their finances and take pride in it. They may hold onto their chequebooks and brokerage statements more tightly than they do their car keys.

Story continues below advertisement

Take the parents of John M. Smartt Jr., a Knoxville, Tenn., certified public accountant and investment adviser, who have been married for almost 70 years. Just last week they finally agreed to merge their separate chequing accounts and allow Mr. Smartt to write cheques for them.

Furthermore, unless aging relatives have thought ahead and done the paperwork -- joint bank accounts, powers of attorney and the like -- their family members may not have access or any legal right to discuss those finances.

At least it's a situation that many others, including professionals such as Mr. Smartt, have faced. Here are tips from those who have been there on how to handle aging relatives and their finances.

Be alert.
The early signs of dementia are not easy to discern. Your relative may sound like he's on top of his game but could still be slipping. Look for overflowing paperwork on their table or desk, says Linda Hill, a gerontology social worker with Aging Network Services in Bethesda, Maryland. Be concerned if a relative starts donating to charities that are not in the usual repertoire or starts buying items from television ads. Forgetting names is not a particularly strong sign of dementia (thank goodness!), but forgetting proper nouns such as "couch" or "telephone" may be.

Ask before it's necessary.
Lauren Lindsay, a Louisiana financial adviser, has her clients fill out an "incapacitation letter" that answers the question, "If we have concerns that you are not acting like your 'normal' self, who do we contact?" You can flip that around and get a letter sent to your relative's adviser with language such as, "You're fine now, but could you notify your adviser that it's OK to talk to me if you should have troubles down the road?" Use the same approach to get a power of attorney letter.

Be diplomatic.
Suggest to your parents that it would be a good idea to have your name on their checking account in case they are ill and need someone to write checks for them. Or offer to pay the bills to save them work, then let them sign the checks.

Use even more finesse with investment accounts - the stakes are higher.
Don't tell an uncle or aunt that you think they aren't capable of making buy and sell decisions. Tell them you admire their long history of smart investing and would like to learn from them. Ask whether you can sit in on meetings with their adviser.

Story continues below advertisement

Put the adviser on notice.
If your relative is working with a broker or adviser who is actively managing the account, let that person know you have concerns about your relative's ability to approve trades. That professional may not be permitted to talk to you, but she can listen. Trading on behalf of a demented client can increase an adviser's legal liability, writes Steven Starnes, a McLean, Virginia financial planner in a recent article in the Journal of Financial Planning titled "Is Your Firm Prepared for Alzheimer's?"

Of course, more elderly people are ripped off by their relatives than they are by their financial advisers, so the adviser might be as suspicious of you as you are of him. Working together, though, you may be able to calm activity in the account.

Use subterfuge.
When a relative becomes more demented and resistant, Ms. Hill recommends stronger measures. She has advised clients to file change-of-address cards with the postal service so aging relatives don't get all the mail they otherwise would, though strictly speaking that is something they should have a legal power of attorney to do. Important bills -- or pesky solicitations -- can thus be steered to your home and away from Grandma's. She has also told people to hide credit cards or cancel accounts.

Bring in professionals.
You can hire a bookkeeper to help your dad pay bills. You can invite your mom along when you meet with your financial adviser, or recommend a trusted third party. Some parents may find assistance from that impartial third party easier to accept than help from within the family.

Get drastic.
Sometimes, none of the easy solutions will work, says Ms. Hill. In that case -- and if the relative is losing significant amounts of money because of mismanagement or trusting the wrong person -- you may have to go to a U.S. court and file for a conservatorship so you can take over their finances. That's painful, but it can provide the protection a severely demented relative may need.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies