Damage prevention and control for financial incapacity.

A VIRTUALLY UNIVERSAL POLICY AND PRACTICE QUANdary in an aging society is how to prevent the risks attendant to a loss of capacity—whether involving a loved one, a patient, a client, a neighbor, or other member of the community. Professionals, including physicians, lawyers, and bankers, report that they struggle to define their appropriate roles, if any, in dealing with an older person’s diminished capacity, particularly at the nexus of financial matters. Because financial capacity is among the first to decline in individuals with emerging cognitive impairments, it can be the canary in the coal mine of impending dementia. Moreover, the consequences of ignoring these declines can be catastrophic for individuals and families. Of special concern is the risk of financial abuse and exploitation. A 2009 study of financial elder abuse by the MetLife Mature Market Institute, the National Committee for the Prevention of Elder Abuse, and the Center for Gerontology at Virginia Polytechnic Institute and State University estimated the annual loss by survivors of elder financial abuse to be at least $2.6 billion. That kind of financial damage on the personal level directly affects the viability of housing, independence, health, and well-being. Effective steps can be taken in policy and practice to respond to financial capacity issues but require awareness across the institutional and social spectrum. First, professionals should encourage individuals at risk for financial incapacity and their family members to plan ahead for the contingency of impaired financial capacity. Elder law attorneys and estate planners reach only a small proportion of the older adult population. Bankers and financial advisors are not always attentive to advising how an individual can preserve one’s control over finances. Similarly, employers offering pension and savings plans frequently overlook the need for education about planning for financial management in the face of diminished capacity. For primary care clinicians, educating patients about the planning tools available for dealing with future financial incapacity may seem far afield of their role. But if so, it is a missed opportunity to advance the long-term health and well-being of aging patients. Compare the lack of attention to diminished capacity for financial matters with the attention given to that for health decisions. State governments support tools such as health care powers of attorney and living wills and the federal government requires Medicare and Medicaid institutions to provide information and education on patients’ decisionmaking rights. Advance planning for financial decision making should receive the same level of systematic education and promotion. The annual wellness examinations for Medicare patients under the new health reform law provide a promising opportunity for both capacity screening and education on planning tools for financial decision making as well as health care decision making. In addition, government agencies that provide income maintenance such as the US Social Security Administration and the US Veterans Administration have an opportunity in this regard. All produce a substantial volume of consumer resources that could easily stress the importance of advance planning for financial management. A second step requires strengthening the planning tools. The most common device families use to help with day-today money management for aging parents is the traditional joint bank account. Setup is simple and a joint owner (the adult child) can pay bills for the owner (the parent), if needed. However, it also carries appreciable risk. A joint owner has the practical ability to “take the money and run” or, less visibly, misspend funds over time. Debts incurred by the joint owner (even if unrelated to the aging parent) can subject the joint account to legal action, and the most typical joint ownership includes the right of survivorship, that is, sole ownership upon death of the other owner, which may not be the result intended by the parent when multiple heirs are involved. A little-known or used but good alternative is the multiparty account without a right of survivorship, sometimes dubbed a “convenience account.” The “helper” person, added to this type of account, essentially serves as an agent for the owner (the person at risk of financial incapacity) and can make deposits and withdrawals on the account, but in the event that the principal account owner dies, the account is