How to guard client finances against dementia

William Cummings first noticed his father’s faltering memory when visiting his dad’s out-of-state home. The power had been cut off because of nonpayment while uncashed checks stacked up inside the house.

Cummings, a CPA/PFS and president of the accounting and wealth advisory firm Concierge Financial Organization, moved his father to Tampa, Fla., and became his caretaker in 2011 following a diagnosis of Alzheimer’s and other ailments. It touched off a steep learning curve for Cummings, who had been caught off guard by his father’s illness despite many years of professional accounting and financial planning experience.

“I was a deer in the headlights,” he said. “Google doesn’t tell you what you need to know. I learned through my own trial and error in making decisions for my dad.”

Cummings’s father died in 2014, and the CPA financial planner realized there was a need to help others in similar situations. He wrote a book — It Wasn’t on My Calendar: 13 Lessons in Working Through Elder Care and Alzheimer’s — and now dedicates a fair portion of his firm’s work to elder care services.

Those with dementia can easily fall prey to fraudulent schemes, be taken advantage of, or simply not make the wise financial decisions they may have in the past, according to the National Institute on Aging. Financial issues are often one of the first signs that a person may be struggling with a dementia-related condition.

Cummings and other CPAs with experience helping aging clients shared their tips on ways to help clients prepare for their later years.

TALK TO EVERYONE

Conversations about elder care planning aren’t just for clients eligible for AARP membership, Cummings said. He talks to all his clients about their family situation to hear if they have parents or grandparents struggling with health issues.

Having a full financial picture will help Cummings figure out if he needs to account for his clients potentially having to cover the financial costs of aging relatives.

“We’re going to plan for the worst and hope for the best,” he said.

Just mentioning the need to have financial protections in place for aging relatives has led to more firm business, with Cummings taking on work with older generations in a family.

LISTEN

Marcia Campbell, CPA, the owner of Marcia L. Campbell, CPA, in Riverside, Calif., has geared her practice toward seniors for the last 15 years, motivated by a high-profile case in her area where a conservator looted the accounts of seniors under the conservator’s care.

“I want to be a safe place for seniors so that they don’t have to worry about their money disappearing or being stolen,” said Campbell, who also is a contributing author for The Complete Resource Guide for Baby Boomers and a contributor to the column Women on Money and Mindset published by the Southern California News Group.

She sets aside an hour for meetings with her older clients to ensure there is time to talk in addition to performing whatever task is at hand. It’s not just a matter of being polite — she asks about her clients’ families to get an idea of whether children live in the area or whether any new caretakers have entered their lives. She also takes note of how clients are interacting and recalling details, to get a sense of whether individuals’ faculties are being tested.

“I’m trying to ask questions that will give me some idea of what’s going on in their life and if they have a predatory child or someone like that,” she said.

She also wants to be able to observe if her clients seem to be having any changes in their abilities to manage their own affairs. One way of doing that is by encouraging clients to stop by her firm to visit with her or the staff, and many will do so and drop by with fruit from their California backyards. Campbell uses those chance encounters as another way to talk and note if their demeanor seems off.

BE AVAILABLE

CPAs can advise their older clients if those clients are approached by a family member or someone else in their life and asked to give them money or invest in some type of business or project, said Jim Sullivan, CPA/PFS, the author of The Adviser’s Guide to Retirement and Elder Planning: Financing Retirement Healthcare. Older clients may need CPAs to help evaluate these requests, given that people are more susceptible to scams as they age, especially if dementia-related issues are at play. (See the sidebar, “What to Do When You Suspect Exploitation.”)

“You can be more trusting, whereas 20 years ago, you would have realized there’s got to be something wrong with this proposal,” he said.

CPAs provide a valuable service when they let older clients know they can call and ask those questions, he said.

TALK ABOUT TRUSTEES AND POWERS OF ATTORNEYS

Cummings makes sure he has a client’s full financial details, including the names of beneficiaries and trustees, as well as who has power of attorney and health surrogate powers. He keeps that information on file for each client, even if he or she is not currently dealing with memory loss or capacity issues. Having the information on hand — and easily accessible — can be enormously helpful if the situation changes and Cummings and his firm need to help family members or others suddenly navigate a person’s finances.

He then reviews that information at annual meetings to make sure things are up to date and there haven’t been any changes.

“It’s really staying on top of things,” Cummings said.

Campbell also ensures she has the contact information of children who may live out of the area so she can alert them if she notices spending patterns or behaviors that seem out of character for their parent.

“I make sure I have someone to contact to say, ‘Maybe you need to talk with mom and dad and see what is going on,'” she said.

COORDINATE WITH OTHER PROFESSIONALS

Having the ability to coordinate with other professionals who work with older clients is helpful, Campbell said.

She makes sure to gain a client’s permission for those interactions early on in her relationship with a client.

“I will ask if I can contact that person if I have questions,” she said. “That’s an easy way of getting introduced to that person.”

She can contact them if she notices something strange — like a new caregiver who may seem to be answering questions for her client — and ask if they’ve had similar observations. This team approach has allowed Campbell to suggest attorneys experienced with elder issues and has led to business opportunities, with other professionals in the area frequently referring their clients to Campbell.

OFFER SERVICES TO HELP WITH FINANCES

Campbell offers a number of services to her older clients, from quarterly meetings to examine and reconcile bank statements to scenarios where she has been granted the authority to pay for a person’s day-to-day care at a nursing home or similar facility.

She often takes those quarterly meetings as a chance to scan through the statements and ensure there have been no fraud red flags or spending in a way that might suggest capacity issues.

If she does notice something, she can talk with the client, or appointed trustees, to try to find a way to stop any issues before they become major problems.

Given how much their clients trust them, CPAs can be instrumental in helping people stay financially safe as they age, said Cummings. The amount of financial fraud, with increasing numbers of schemes targeting seniors over the phone or in person, means CPAs can help clients who may be vulnerable because of age or memory-capacity issues. “If you are meeting with your clients, it’s something you have to have a discussion about,” he said.

What to do when you suspect exploitation

CPAs who believe a family member or a new caregiver may be stealing from or exploiting a client should act on those concerns. Here’s advice on how CPAs can spot signs that a client may be at risk of financial exploitation and how to report those concerns, as shared by William Cummings, CPA/PFS, the president of Concierge Financial Organization in Florida.

Look for warning signs

There aren’t hard-and-fast signs as to when someone is being exploited. That said, it’s important to be aware of what could signal an issue. Among the things Cummings takes note of are erratic spending patterns, cognitive issues coupled with erratic behaviors, missing possessions, money missing or withdrawn from banks and investment accounts, and unpaid bills.

Document concerns

If you have suspicions there might be something amiss, but it’s not something you can conclusively prove, at least make note of your concerns. Documenting the precise details of your observations can help piece things together later if more issues arise.

Talk to clients in advance

It can help enormously if you’ve already had conversations with clients about what happens if they become incapacitated and what they’d like you to do if you suspect they’re being taken advantage of financially. Have them identify a trusted individual you can contact in such a situation, and keep written permission on file to avoid violating any confidentiality rules if you need to reach out. Also make sure you have current power-of-attorney documents on file.

Know when and where to report concerns

Most states have avenues to report suspected financial abuse and exploitation, and state-level CPA societies can help identify the specific group to contact. Other resources include the National Adult Protective Services Association (napsa-now.org) and local councils on aging. For complex fraud involving investments or stocks, there are avenues to report suspicions to the Financial Industry Regulatory Authority as well as the SEC and Federal Trade Commission.

Don’t ignore the problem

If you suspect a client is being preyed upon, it’s important to forward those concerns to a reporting agency empowered to investigate, or to voice your observations to family members or others who could intervene.

About the author

Sarah Ovaska is a freelance writer based in North Carolina.

To comment on this article or to suggest an idea for another article, contact Drew Adamek, a JofA senior editor, at Andrew.Adamek@aicpa-cima.com.

AICPA resources

Articles

• “Financial Planning for Clients Who Have Suffered Traumatic Brain Injuries,” CPA Insider, Sept. 3, 2019
• “How CPAs Can Help Prevent Elder Fraud,” CPA Insider, May 7, 2018
• “Cognitive Impairment Does Not Necessarily Have to Derail Your Clients’ Planning,” JofA, June 12, 2017

CPE self-study

• Elder and Special Needs Planning (#166461, online access)
• PFP Boot Camp: Retirement and Elder Planning (#166180, online access)

For more information or to make a purchase, go to aicpastore.com or call the Institute at 888-777-7077.