By Sarah Boden
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| Jonnie Lewis-Thorpe, 82, lost her home due to financial missteps that
her daughter, Angela Reynolds, 53, says were caused by Alzheimer's
disease. Lewis-Thorpe now lives with Reynolds in Pittsburgh. |
The signs were there: unpaid bills, unusual cash withdrawals and,
oddly, the mortgage of the family home refinanced — at a higher interest
rate. Angela Reynolds worried when her mother’s refrigerator was nearly
empty. But she missed the trail of financial flags until it was too
late.
The warning came for Sharon Gwinn when the grocery store
declined her credit card, despite a healthy account she held with her
husband. She contacted her bank, assuming it was fraud. It wasn’t.
As
the power-of-attorney agent, Gina keeps careful watch over her
grandmother’s finances. But that didn’t stop a relative from allegedly
taking $54,000 when an opportunity presented itself.
All three families stumbled into a hard reality that faces more and
more aging Americans: The financial consequences of cognitive functions
lost to various neurological diseases. The costs of these illnesses — Alzheimer’s disease alone is projected to affect 7.7 million Americans over age 65 people by 2030 — are enormous.
Isolated
or ill seniors are more vulnerable to exploitation by scammers or
financial abuse from family members. Other times, people buy things
without reason, piling their homes with unopened boxes or draining their
savings. Or older adults impulsively give away large sums of money.
This all puts their homes, retirement savings and inheritances at risk.
Despite
the commonality of those risks, solutions remain elusive. Congress
hasn’t made it a priority. Financial institutions are slow to act,
arguing that they have neither the ability nor authority. Aging parents
and adult children alike can be paralyzed by the prospect of
uncomfortable conversations, so they avoid them. Until that changes,
families are left on their own to navigate a challenging maze of
emotions, actions and consequences.
Meanwhile, a growing body of
research is clear: Financial problems are not just a result of dementia
but can be a predictor of it.
Biology: complexity and inevitability
One
weekday during the spring of 2018, Angela Reynolds sat next to her
77-year-old mother in a courtroom in downtown New Haven, Connecticut.
She listened in discomfort as strangers revealed intimate details of
their finances in a public setting.
Then it hit her: "Wait a second, we're going to have to go up there, and someone's going to be listening to us.”
Reynolds
was there with her mother, Jonnie Lewis-Thorpe, because the family home
was in foreclosure. The daughter hoped that if she explained to the
judge that her mother had Alzheimer’s disease, which had caused a series
of financial missteps, then she could stop the seizure of the property.
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| Jonnie Lewis-Thorpe and Angela Reynolds looking at photographs from the family's past. |
Alzheimer’s had crept into Lewis-Thorpe’s life. A widow, she had
lived alone for several years and had made arrangements, including
naming Reynolds as power-of-attorney agent. But Reynolds lived 450 miles
away in Pittsburgh and wasn’t there to see the incremental declines. It
wasn’t until Reynolds began reviewing her mother’s bank statements that
she realized Lewis-Thorpe — once a hospital administrator — had long
been in the grip of the disease.
“We thought it was just a normal part of aging,” recalled Reynolds. “By the time we caught on, it was too late.”
Financial
problems are a common reason family members bring their loved ones to
the office of Robin Hilsabeck, a neuropsychologist at the University of
Texas at Austin Dell Medical School who specializes in cognitive issues.
“The
brain is really a network, and there are certain parts of the brain
that are more involved with certain functions,” said Hilsabeck. “You can
have a failure in something like financial abilities for lots of
reasons caused by different parts of the brain.”
Some of the
reasons stem from the simple act of aging, as Reynolds assumed about her
mother. But when a person’s cognition begins to decline, the problems
can grow exponentially and follow different paths.
Age, dementia and disease
Alzheimer’s
has become a cultural umbrella term for dementia; the two words are
often used synonymously. But this is a misnomer. Dementia is not
classified as a disease per se, but rather it is a syndrome involving
the loss of cognitive abilities. The cause can be one of several
neurological illnesses, including Alzheimer’s or Parkinson’s, or it can
result from brain damage such as a stroke or head injury.
In most
cases an older adult’s dementia is progressive. The first signs often
manifest in memory slips along with changes in high-level cognitive
skills that deal with organization, impulse control and the ability to
plan — all critical for money management. The causes of dementia vary,
as do the financial woes it can cause.
For example, with
Alzheimer's comes a progressive shrinking of the brain’s hippocampus.
That’s the catalyst for memory loss which, early in the disease —
sometimes before loved ones notice — can result in a person forgetting
to pay their bills.
Lewy body dementia causes fluctuating
cognition: A person veers from very sharp to extremely confused, often
within short passages of time. “They might be perfectly fine making a
financial transaction early in the day,” says Hilsabeck. “Then later in
the day they may not be able to do it.”
Those with frontotemporal
dementia might suffer a loss of nerves in the part of the brain that
governs impulse control and problem solving. That can lead to large,
spontaneous purchases — actions a healthy brain would have tempered.
Vascular
dementia, which sometimes accompanies a stroke, reduces blood flow to
the brain. That can undermine planning, processing and judgment, making
individuals easier to defraud.
"They
answer the phone, and they talk to the scammers," says Hilsabeck. "The
alarm doesn't go off in their head that this doesn't make sense."
Even
before or without developing some form of dementia, people can
experience mild cognitive impairment, or MCI — a reality that affects 10-20% of people 65 or older.
They can be easily confused, struggle to recall names and even have
issues with judgment. While this population isn’t as vulnerable as
people with dementia, they are at heightened risk of financial mistakes
or more likely to become victims of fraud than the general population.
Sometimes MCI is just a facet of aging, along with joint pain and
graying hair. But it’s often the early presentation of diseases such as
Alzheimer’s or Lewy body dementia. Studies have found that 10-15% of people with MCI develop dementia every year; within five years, roughly half of people with MCI will get it.
“Financial
decision making is very challenging cognitively,” says Dr. Jason
Karlawish of the University of Pennsylvania’s Penn Memory Center. “So,
if you have even mild cognitive impairment, you can make mistakes with
finances, even though you're otherwise doing generally OK in your daily
life.”
Some of those mistakes are irreversible. Despite Angela
Reynolds’ best efforts on behalf of her mother, foreclosure of the
family home went through in 2018, about a month before Thanksgiving.
Property
records show that Lewis-Thorpe and her husband bought the two-bedroom
Cape Cod for $20,000 in 1966. Theirs was one of the first Black families
in their New Haven neighborhood. During that half-century, Lewis-Thorpe
hosted church cookouts in the backyard and celebrated Christmas with
her two daughters and eight grandchildren in the living room. Members of
the local chapter of Negro Business and Professional Women Clubs
gathered at her dining room table to talk politics and business
ventures.
Lewis-Thorpe had achieved the American dream of
middle-class professionalism and planned to pass that prize of
generational wealth onto her children.
Instead, U.S. Bank owns the property. A 2022 tax assessment lists its value at $203,900.
Financial accountability
Sharon
Gwinn and her husband had been married almost 30 years when she cleared
out their savings and checking accounts, transferring them to her name
only. It felt horrible, like she was stealing, but short of losing
everything, she was out of options.
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| Sharon Gwinn, 63, was widowed in 2018 after her husband, Richard, died of Lewy body dementia. |
That was some 20 years ago. Gwinn’s husband was still working as a
hospital orderly when he started to spend money erratically. One
Thursday night he racked up a $3,000 tab at a Pittsburgh cop bar, buying
rounds for strangers. Gwinn discovered his splurge — something totally
out of character for him — when her credit card was declined at the
grocery store. That’s when she realized that her husband was showing the
first of a series of cognitive changes that eventually would be
diagnosed as Lewy body dementia.
“He drove for years after his
financial awareness was gone,” Gwinn says. “It’s just this one area.
It’s what attacked his brain first.”
Changes in financial habits
are a common early sign of cognitive decline, according to Penn’s
Karlawish. He often sees patients who are navigating financial
disasters. What he doesn’t see are changes in banking practices or
regulations that would mitigate the risks that come with aging and
dementia.
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| Richard and Sharon Gwinn dancing at their eldest daughter's wedding. |
“A thoughtful country would begin to say we've got to come up with
the regulatory structures and business models that can work for all,” he
says, “not just for the 30-year-old.”
The vast population of Baby
Boomers is entering retirement age with significant capital. While
members of that generation accounts for 22% of the overall population,
Federal Reserve Data shows that they hold just over half the household wealth in the U.S.
Gwinn,
now 63 and a widow, is part of that generation. While she protected
herself and her husband from financial ruin, Gwinn worries that if she,
too, develops dementia, she could bankrupt herself before anyone
notices. That would leave her at the mercy of taxpayer-funded programs
such as Medicaid for her long-term care or burden her children with
making near-impossible decisions about her daily life.
“The thing that bothers me the most is my liquid money,” she says. “[My kids] do not know my day-to-day spending habits.”
Political inaction
No
firm data tracks how many older adults rely on public assistance as the
result of financial mistakes caused by cognitive decline; they get
lumped in with everyone else receiving government support.
But a growing body of research shows that people with dementia face worse financial outcomes. A 2020 study from Johns Hopkins University
of 81,000 Medicaid beneficiaries found that people with Alzheimer's and
related dementias started to develop subprime credit up to six years
before a formal diagnosis. It is among a cluster of studies that point to financial problems as a possible warning sign — rather than just the fallout — of cognitive decline.
Despite
that evidence and the aging of America, the risk-averse financial
industry is reticent to act. Nor have lawmakers made the financial
safety of older adults a priority.
The last time elder wealth management was addressed in major legislation on the federal level was 2018’s Senior Safe Act.
The law gives immunity to financial institutions in civil and
administrative proceedings in instances where employees report possible
exploitation of a senior — provided the bank or investment firm has
trained its staff to identify exploitative activity.
It’s a
lackluster policy, says Naomi Karp, an expert on aging and finances who
spent eight years as a senior analyst at the Consumer Financial
Protection Bureau’s Office for Older Americans. That’s because the act
makes staff training optional, and it lacks oversight.
Avoid these characteristics when selecting a financial advocate/caregiver
- Dishonest or secretive
- Doesn’t pay bills on time
- Owes money
- Faces personal legal or financial troubles
- Has a serious mental health or addiction issue
- Likes to gamble
- Has a strong sense of entitlement
- Doesn’t get along with the people who matter to you
Source: Thinking Ahead Roadmap
“There’s no federal agency that's charged with covering it or setting
standards for what that training has to look like,” Karp says. “There’s
nothing in the statute about that.”
One corner of the financial
industry that has made modest progress is the brokerage sector, which
concerns the buying and selling of securities, such as stocks and bonds.
Since 2018, the Financial Industry Regulatory Authority — a
non-governmental organization that writes and enforces rules for
brokerage firms – has required agents to make a reasonable effort to get clients to name “trusted contacts.”
These
trusted contacts are similar to emergency contacts listed for health
care providers or even airlines. They’re notified by a financial
institution in the case of concerning activity on a client’s account.
The notification will include a basic explanation of the situation
without revealing specific financial information.
Ron Long, the
recently retired director of elder client initiatives at Wells Fargo,
explains it this way: “It appears [the client] has fallen in love with
someone in Belarus, and it appears to be a person who is taking
advantage or exploiting.”
But the trusted contact has no
authority. The hope is that once notified, the named relative or friend
will talk to the account holder.
It’s a start, but a small one.
This low-stakes effort is limited to the brokerage side of operations at
Wells Fargo and most other large institutions. The same protection is
not extended to clients’ credit cards, checking or savings accounts.
Industry reluctance
When
she was at the Consumer Financial Protection Bureau, Naomi Karp and her
colleagues put out a set of recommendations for companies to better
protect the wealth of seniors. The 2016 report included employee
training and tweaks to fraud detection systems.
“We would have
meetings repeatedly with some of the largest banks, and they gave a lot
of lip service to these issues,” Karp says.
Karp has seen some
smaller community banks and credit unions take proactive steps to
protect older customers — such as comprehensive staff training and
improvements to fraud detection software. But there’s a hesitancy
throughout the industry to take more decisive action, which seems to
stem, in part, from fears around liability, she says. Banks are
concerned that they might get sued — or at least lose business — if they
intervene when no financial abuse has occurred or a customer's
transactions were benign.
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| A stair lift once used by Sharon Gwinn's husband, Richard, sits at the entrance to the basement. |
Policy solutions that address financial vulnerability also present
logistical challenges. Expanding the use of something such as the
trusted contact program isn’t like flipping a light switch, says Long of
Wells Fargo. “You have to solve all the technology issues: Where do you
house it? How do you house it? How do you engage the customer to even
consider it?”
For it to work, people would need trusted contacts
for all their financial accounts: savings, checking, loans and multiple
credit cards. The extensive list can span several companies — none of
which is authorized to talk to each other about an individual client’s
account.
The tech world offers some solutions. SilverBills is a concierge service that makes sure bills are paid on time and inspects invoices for fraud and errors. Whealthcare
gathers trusted contact information, assesses people’s money management
abilities and outlines steps clients can take to keep their finances
safe. And EverSafe scans accounts for unusual spending, such as the huge bar tab that Sharon Gwinn’s husband tallied.
“Those
really smart scammers aren't just going to steal a huge amount from one
account,” says Liz Loewy, EverSafe’s chief operating officer, as well
as the former chief of the elder abuse unit at the New York County
District Attorney’s Office. “They usually are smart enough to start
small and cover more than one account at more than one institution.”
Not
everyone can afford a service like EverSafe: packages range from
roughly $7 to $26 a month. But such a service might have helped Gwinn,
who couldn’t prevent her husband from signing up for new credit cards
even after she took control of the couple’s finances. After consulting
her four children, she decided to purchase the basic package. Now
Gwinn’s oldest daughter, who is designated as her power-of-attorney,
will be notified if EverSafe flags anything unusual. This added
protection makes Gwinn feel lighter.
“She can hopefully help me nip things in the bud before I get myself into trouble,” Gwinn says.
Fraud and exploitation
A
red folder holds records of financial transactions dating back about
five years from the savings and checking accounts held by Gina’s
grandmother. Combined, the accounts consistently hovered around $54,000
until Oct. 3, 2022. That’s when, according to Gina, the accounts were
emptied by a close relative. (At the family’s request, WESA is not using
Gina’s last name or identifying her grandmother, who has dementia.)
Gina
traces events back to a hospital visit. Her grandmother had taken a bad
fall, and Gina and the relative faced off at her bedside. Old
resentments boiled over into shouting: another family member who
witnessed the incident said security had to be called. The next day,
Gina says, the money was missing from her grandmother’s account.
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| Gina says she had to involve law enforcement after a relative drained her grandmother's accounts. |
Gina was there when her grandmother phoned the relative about the
money. She says the relative deflected, shifting the conversation to the
grandmother’s condition, and then denied responsibility about the empty
accounts: “At one point, [the relative] blamed other family members.”
A University of Southern California 2019 study
of calls reported to the National Center on Elder Abuse found that the
majority of calls (55%) alleged financial abuse and that family members
are most often cited as the perpetrators of any kind of mistreatment.
Pittsburgh-area
elder law attorney Kim Orlando who represents victims of financial
abuse, estimates that 80% of her clients suffer from some form and
degree of dementia. Many also suffer from loneliness.
“They’re so easy to take advantage of,” Orlando says. “It's almost as if they're being groomed.”
The National Council on Aging estimates that seniors in the U.S. lose $36.5 billion every year due to elder financial abuse. (In comparison, last year Americans spent $45 billion in out-of-pocket costs on nursing home and other institutional care.) The amount of money taken from older adults via abuse and exploitation is likely an undercount: A study from New York found that for every documented instance of elder financial exploitation, another 44 cases go unreported.
It's also hard to say what percentage of victims of elder fraud have
dementia or MCI, though it's widely agreed these conditions put people
at greater risk.
Investigating alleged financial abuse is
time-consuming and often requires specialized expertise in accounting
and law. That is further complicated when victims are reluctant to
accuse a relative or friend, or when dementia leaves them unaware they
were victimized.
“There are too many of these cases out there for
us to work all of them,” says Brooklynn Riordan, the supervisory special
agent of the complex financial crimes section of the FBI’s Pittsburgh
field office. To bolster official investigations, the agency launched a
campaign to educate older adults about their risk.
The
added challenge of investigating cyber-based scams, especially when
they originate outside the U.S., makes guilty verdicts rare. But Riordan
encourages people to report any suspected fraud. While a single and
relatively small loss — a few thousand dollars — might not ignite an
investigation, it could add to a pattern of fraud targeting multiple
victims.
When Gina tried to recover her grandmother’s $54,000, she
says she faced a daunting gantlet. It was hard to convince the bank to
provide documentation despite her authority as power-of-attorney. A
Pittsburgh police detective assigned to the case told her there was
nothing he could do; the relative had been named on her grandmother’s
accounts years earlier and those documents hadn’t been updated, although
the relative was not participating in her caregiving and did not have
permission to withdraw funds. Gina also contacted the Social Security
Administration, Pennsylvania’s Department of Aging, and reached out to
her state senator and a Pittsburgh city council member. Her efforts went
nowhere.
Eventually, Gina emailed WESA; a reporter referred her to the Pittsburgh nonprofit Center for Victims. An advocate there then connected Gina to an investigator at the Allegheny County District Attorney’s office.
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| Gina and her grandmother look at their Christmas tree. |
An Oct. 13 email from detective Jackie Weibel confirms Gina’s
account: “You recently sent an email to a local radio station about a
situation with your grandmother. I have been assigned to investigate the
matter … What does your schedule/availability look like for the next
two weeks.”
That route isn’t open to everyone. Unlike Allegheny
County, which is the second-most populous county in Pennsylvania, many
local jurisdictions lack specialized fraud investigators. To narrow that
gap, the Pennsylvania Department of Aging recently received a federal
grant to create a team of specialists to support smaller agencies. But
the four-person unit has the bandwidth to cover just a fraction of the
state’s elder financial fraud cases. A spokesperson says investigators
will focus on more complex cases involving higher dollar amounts and
with multiple financial assets.
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Gina's grandmother looks through a word search book, which she enjoys doing in her free time.
|
Orlando, the elder law attorney, says in her experience she hasn’t
seen law enforcement get involved unless the potential for recovery was
at least $250,000: “That is not something they would want to utilize
taxpayer resources to investigate.”
But Pennsylvania AARP's Director of State Advocacy Teresa Osborne told WESA in August that she hopes the unit’s investigations will result in more criminal prosecutions.
"Generally,
we see financial elder abuse treated only as a civil matter, which
means there is no jail time or criminal record for the abuser,” Osborne
says. “The penalty may be just returning the stolen assets or money.”
In
Gina’s case, the hint of criminal prosecution may have been enough. She
had feared the relative who tapped her grandmother’s accounts would
spend the money before it could be recovered through the legal system.
But the money was returned. While Gina says she is still angry, she
won’t push for criminal charges.
“To drain accounts that bills are
still coming out of … They didn’t care about overdraft fees, they
didn’t care about utilities being cut off,” says Gina. “It was very
shameful.”
Hope and reality
When
it comes to the tricky mix of cognitive decline and money management,
the deck is stacked against aging Americans. Unless policymakers and
financial institutions step up, it’s left to families to make a
collaborative plan around aging and finances.
That’s far easier said than done. It
requires people to acknowledge the inevitability of death — their own
and that of those they love — and of the physical, mental and financial
realities of aging. Even in the best of circumstances, money is a touchy
subject — one that can raise discomfort and hackles, and one that is
often considered no one else’s business.
"Money can represent stability, control, power, autonomy and safety," says New York City-based therapist Matt Lundquist.
Lundquist,
who specializes in financial family therapy, says asking a person to
relinquish control of their finances can be a massive hit to their sense
of self. Think of it as a giant step up from asking someone to give up
their car keys.
So, it's crucial not to blindside family members
with this big talk; instead, Lundquist advises that people give a
heads-up that money issues need to be discussed: "It makes a difficult
conversation much more likely to go well."
Again, easier said than done. Attentiveness and love don’t erase those challenges.
Angela
Reynolds says household finances weren’t discussed in her family. That,
and her busy life two states away, created inevitable barriers to
awareness of her mother’s plight. Still, she blames herself for the loss
of the family home. "It's my mother. I'm going to feel guilty."
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| Sharon Gwinn doesn't want to be financially dependent on her adult
children as she ages. "What I have, I want my money to be spent for my
care and I don’t want to burden them." |
Gwinn wants to protect her children from bearing a similar guilt. But
she knows it’s unlikely her bank, credit card company and medical
providers will spot red flags in time if dementia siphons away her
retirement savings. She subscribed to a basic EverSafe service and will
consider adding safeguards as she ages.
Gina’s grandmother got her
money back. But Gina regrets not pushing for updates to legal
documents, including which relatives had access to the accounts, that
would have prevented any exploitation. She knew there was a risk — but
deferred to her grandmother, who didn’t want to spark a family conflict.
Carole
Shepard, a self-employed geriatric care manager in suburban Pittsburgh,
cautions that many hard conversations are necessary and conflicts are
inevitable, especially when they involve someone with progressive
dementia. Too often, she sees her older clients in crisis because their
hope had been that one day they'd peacefully die in their sleep without
any of the humiliations of aging.
"Hope is not a strategy," she said.
That's why Shepard and her
husband, both in their 60s and both with family histories of vascular
dementia, have drafted extensive plans and shared them with their adult
children. They appointed their younger son as financial
power-of-attorney and their older son as medical power-of-attorney.
Shepard thinks she and her husband will sell their home within five
years and rent an apartment in Pittsburgh’s Strip District — a walkable
area near arts venues and restaurants. Then they’ll start looking for a
senior living community that includes a memory care unit.
By
making these decisions now, Shepard and her husband believe — hope —
they're preserving their autonomy. Yet she knows that all their planning
won't protect their children from some degree of hardship, especially
if either she or her husband develops dementia. Symptoms are
unpredictable and variable: depression, irritability, paranoia,
impulsiveness. That creates a dilemma for adult children: Pushing help
onto resistant parents incites strife; ignoring reality begets neglect.
There
is no reliable roadmap for caregivers of people living with dementia,
says Robert Levenson, a professor at the University of California,
Berkeley who specializes in the emotional changes that accompany aging.
"The truth is it's going to be difficult, and the chances of complete
success are not very good."
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| Jonnie Lewis-Thorpe looking at family photos. |
Levenson's best advice is to include the person with dementia in the
decision-making process as much as possible. If a person can't
articulate their desires, it's still important to consider the values
and interests they held while healthy. For example, perhaps a lifelong
Pittsburgh Steelers fan is no longer capable of paying their own bills;
the person in charge of their monthly budget could include a cable
package that allows them to watch NFL football.
It's crucial to
remember that the disease is the enemy, Levenson says: "Somehow, you
have to try to find a way to stay on the same side with your loved one
and not end up blaming each other.”
Angela Reynolds and her mom
have been able to do this. After a traumatic departure from New Haven,
Jonnie Lewis-Thorpe moved into her daughter's house in Pittsburgh. Now,
Reynolds' primary concern is finding a caregiver to be with her mom
during the day.
On a morning with visitors in late November,
Lewis-Thorpe struggles to follow conversations but seems content. Mother
and daughter are both wearing black slacks and bright red sweaters.
They joke easily with each other while looking over old family photos.
The scene echoes a day from June. On that morning both women wore silky
blouses with bold geometric prints. Sitting in the backyard, where
coyotes sometimes visit, Lewis-Thorpe looked over at her daughter and
smiled: “She’s done marvelous for me. She really has.”
WESA’s
reporting on dementia and financial decision-making is part of a
fellowship with the Association of Health Care Journalists, supported by
The Commonwealth Fund.
Full Article & Source:
The cost of forgetting: Dementia's tax on financial health
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