My 84-year-old mother forgot to pay her taxes and has some questionable credit-card charges; should I be worried? – MarketWatch

Dear Ms. MoneyPeace,

My sister has expressed concerns about our 84-year-old mothers memory and her ability to make reasonable financial decisions. I think my mother is experiencing the normal aging process, my sister is overreacting, and a decision to take away my mothers financial independence will cause even more harm than a few careless or forgotten payments.

Since I live far away and only see my mother two or three times a year, I asked my sister for some examples. She said our mother had forgotten to make a quarterly estimated income-tax payment and had received a notice from the IRS, had some charges on her credit-card statement from what appeared to be charities that she couldnt explain, and couldnt recall that she had transferred money from an investment account to another sibling.

I speak with my mother every week, and while she might repeat a story from time to time, Im truly impressed with what she remembers. Am I underreacting?

Faraway Son

Dear Faraway Son:

You are asking the right question. Now you need to understand about memory loss and how finances are affected. If a doctors evaluation and diagnosis confirms dementia, there are four steps you can take with your sister and your mother to protect her financial well-being while keeping her independent.

We may think mind decline and dementia only happen in old age or with aging. However, stroke, traumatic brain injury, certain medicines and a host of illnesses, including COVID-19, contribute to memory loss at any age. Even dehydration does. Thats why only a medical professional can diagnosis your mothers condition.

Because your mother knows your name and lives independently does not mean she doesnt need help with her finances, even if a doctor does not see major issues. A recent study by Johns Hopkins medical researchers discovered dementia was associated with adverse financial events years before a clinical diagnosis. These financial events included missing payments resulting in lower credit scores up to seven years before diagnosis.

Normal aging does not include memory loss, or everyone over the age of 65 would exhibit this symptom.

Your mother may be experiencing mild cognitive impairment (MCI) that may be the beginning of something serious or it may not result in any progressive dementia. As for the great memory your mother does have, long-ago memories are stronger for those who may be losing with other cognitive skills. Equally, some elders just want to share their memories as they lose their peers.

Your sister may be noticing a range of small things that have leads her to believe your mother needs assistance. Studies have proven that in most dementia patients, social skills are the last to go. So your regular calls to your mom may not be picking up all the same signs your sister has seen.

Many people with memory loss are aware of changes but may not want to admit them. Others come up with coping skills. One woman I knew kept a list by her phone of each her childs name and their children. So when they called she could ask about them by name. If she did not have that list, she would have been lost. But her adult child on the other end of the phone would have no way of knowing that.

Another client suffered a major stroke. After she was back home, her husband was glad to have her back to normal and they continued shared financial responsibility, with her paying the bills. Yet one look at their checkbook revealed things were not normal. She had started giving to a charity monthly the amount she used to give annually. When I asked about the payment, she said they kept sending requests every month. I guess I forgot that I had given the previous month, she said.

What they were actually sending were thank-you notes, and she had misinterpreted them.

From then on, they paid the bills together, as they had the financial confidence together that individually they lacked.

Memory loss may include a loss of judgment or weakened reasoning. A few careless or forgotten payments seem minor; however, by someone long-detailed and exact in their financial matters, this may indeed be a warning sign.

Protecting your mothers assets is important for her long-term well-being. To this end, there are ways to build in some quality control checks while she maintains her independence. If a financial transition is needed, the steps will be in place. Your sister can implement them, but you can help with some of these from afar.

Start with these four steps:

Designate a trusted person: The Financial Industry Regulatory Authority requires financial institutions to provide a form for a trusted contact on investment accounts. However, the company is not responsible for requiring a client to send it back. Be sure that all your mothers investment companies and financial professionals are notified in writing of who to contact if your mothers money habits change significantly or she cannot be reached.

Install a team effort on cash flow: Your mother may be willing to share online access for her bank accounts for monitoring purposes only. In addition, your sister can share the bill-paying responsibilities by just sitting with your mother as the bills are paid. Couples of course can do this together.

Review and freeze credit reports: This is one important way to prevent your mother from taking out additional loans, credit cards or being scammed in some way. Please note: she will be in the loop as she has to sign the letters to the credit-reporting firms and can remove the freeze at any time. Request her credit report today.

Update legal documents: A financial power of attorney (POA) is essential to handle someone elses financial affairs. A POA needs to be updated every five years to stay relevant. So be sure all your mothers documents are in place. Finally, consider setting up a revocable trust to streamline her financial life. A trust will enable your sister or whoever is the trustee to set up accounts to pay the bills whenever the time comes. Talk to her lawyer to learn more.

Read: 3 reasons a trust may make sense for your family even though your name isnt Trump, Gates or Rockefeller

In addition, be aware of other risks that could lead elders or those with challenges to make poor financial decisions. Phone scammers prey on those at home who answer their phones. Fraudulent mailings that appear to be from non-profits solicit donations. Social media friends request money or instill fear. All these exposures and a brain that is not as quick or solid in decision-making put people at financial risk. Making a plan with your mother to not respond with financial information until she talks to you or your sister may help her stay out of trouble.

Work together with your sister now so that both of you understand what is going on with your mother medically and how it impacts her finances. Too many families do not discuss this possibility, and often one person is left holding the bag when a crisis strikes and is stuck picking up the pieces of poor financial decisions. This is costly and time consuming.

Be proactive, rather than overreacting or beinglaissez faire.

CD Moriarty, CFP, is a columnist for MarketWatch and a personal-finance speaker, writer and coach. She blogs atMoneyPeace. Email your questions to MsMoneyPeaceQuestions@MoneyPeace.com

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My 84-year-old mother forgot to pay her taxes and has some questionable credit-card charges; should I be worried? - MarketWatch