Experiencing a loss of control is never easy, regardless of what and when. It can be particularly difficult when it is a loved one, likely an aging adult, whose cognitive skills are declining and they can no longer manage their finances in the manner needed. “Research has also shown that even cognitively normal people may reach a point where financial decision-making becomes more challenging.” (NYT, Bernard)

Ideally, a plan would be in place in the event that this may occur; however, it is a difficult conversation to have in most cases and many are unprepared until forced to address it. In the early stages, the person may still be fairly independent, performing day-to-day tasks such as self-grooming, making meals, driving, etc. which can mask some of the issues. Warning signs that may indicate to family and professional advisors when an older adult is unable to manage their financial affairs are as follows:

  • Piles of paper and unopened mail – it is not uncommon for a dining room or coffee table, even someone’s bed, to be covered with papers and piles.
  • Unpaid bills, bills paid twice & late fees – all of which can lead to larger problems down the road, this can also include over-donation to legitimate and, in some cases, bogus charities.
  • Increasing credit card debt – especially if bills are not being paid on time and possibly there are erroneous charges not identified.
  • Uncashed checks – oftentimes in piles of paper, unopened drawers, or cabinets there are multiple uncashed checks or even cash.
  • Calls from creditors – caused by many of the previously mentioned signs.
  • Reluctant/unable to report spending information – can be a result of memory issues or possibly irrational paranoia and mistrust of people and institutions.
  • Behavioral changes – repeated calls to family/advisor asking the same question, progressive forgetfulness, easily confused, difficulty recalling words or names.
  • Unusual, large, or repeated account withdrawals – again this can be the result of previously mentioned signs or possibly a “new friend” is taking advantage.
  • Missing or no tax documents – often organizing these documents and turning over to an accountant can be challenging; for some returns haven’t been filed in several years and there has been no communication with the accountant.
  • Family members are too busy or distanced to help – no one is at fault but it is easy for these issues to be overlooked when there is not frequent interaction.

Once some of these signs are observed the actual assessment of cognitive difficulties and determination of financial incapacity is complex. Psychological evaluations, medical reviews, as well as legal standards (that vary from state-to-state) are used in the determination. None of this may be necessary if family or an advisor is able to have a reasonable and productive conversation with the concerned individual.  

Before that conversation takes place, it is important, especially if this is a loved one, possibly a parent, that the family member processes his or her feelings before the talk. Talking about financial situations and healthcare wishes can be emotionally draining for everyone involved. Whether you feel anxious, uncomfortable, upset, know that these emotions are a healthy and normal response. By recognizing these feelings, you are more likely to remain calm during that conversation.

Once an individual skips a payment, doesn’t file a receipt, or overlooks an account notification the situation snowballs quickly. A utility doesn’t get paid, an insurance claim isn’t filed correctly, a mortgage/housing payment is missed, tax day comes and goes. Then the health of their financial affairs is critical and can also have an adverse effect on their emotional, physical, and psychological health. It is extremely beneficial to catch these situations early and be proactive.

At MPB our team has experience with all of the aforementioned warning signs and we are ready to help get things back on track, set up a system, and monitor to make sure there are no slips. In turn, this provides our clients, their families, and professional advisors with peace of mind and the client with a feeling of independence and level of control over their affairs.



About the Author: Lisa Lipton

Lisa Lipton

Lisa grew up in Northbrook, IL, and has lived in the Chicago area for most of her life, other than a few years spent in Baltimore, MD early in her career.  Today she calls Deerfield, IL home. With an undergraduate degree in Advertising and a graduate degree in Integrated Marketing Communications, Lisa has 20+ years of experience working mainly in direct-to-consumer marketing with a focus on direct marketing for a variety of companies.

Having managed her mom’s care for several years as she struggled with failing health, Lisa understands and appreciates firsthand the need for the services and resources My Personal Bookkeeper provides.  Also, being a busy professional herself, she recognizes that someone such as herself may need extra assistance organizing and managing their daily affairs.  Lisa is very excited to combine her professional experience along with her personal empathy to spread the word about MPB and provide support for those who need a helping hand!

In her spare time, she enjoys spending time with family & friends, traveling, exercise, all kinds of music and loves to watch and play tennis.