When a Loved One with Dementia Spends Excessively

In a recent episode of ABC's "Roseanne" spinoff, "The Conners," the sitcom family learns that the family's 90-something matriarch, Beverly, who has dementia, has run up $10,000 on her credit card, bought a Florida timeshare, donated to a sketchy charity and purchased two puppies now living with her in Illinois.

"I know what I'm doing. These are all things I want and need," says Beverly, played by 96-year-old Estelle Parsons. "This one (pointing to one of the dogs) won't do his business in the cold. He needs a warm winter home. That's why I bought the time share in Miami."

Beverly's daughter Jackie, portrayed by Laurie Metcalf, tells her family that after her mother dies "we're all going to get stuck taking care of all these things and dealing with a huge bill."

Bruce Helford, one of "The Conners" producers behind the episode, said Beverly's actions reflect her personality. "Bev is a very independent person," he said, "and I think that in her mind it was just like, 'I'm in a position to do what I want to do and I'm going to do it and I'm at a place in my life where I deserve and I'm going to have the things that I want.' "

The show plays the story line for laughs, but in real life, when a loved one with dementia spends excessively or recklessly, it's anything but funny for the family.

"It makes pretty interesting fodder for the show because there's a lot of people out there going through the same thing," said Dave Caplan, a "Conners" producer who created the episode with Helford and whose father-in-law had Alzheimer's. "It really had touched so many people on the writing staff, including both Bruce and I, that we had emotional stories we wanted to tell."

Excessive spending by someone with dementia is "a big stressor for families and so unfortunate when the losses are hitting right when you need money for caregiving or long-term care," said Lauren Nicholas, an associate professor in geriatric medicine at the University of Colorado.

Inadvertent spending can be a manifestation of Alzheimer's or another form of dementia, sometimes as a response to social isolation. It can also happen when someone has mild cognitive impairment, an early stage of memory loss.

"What we find is that years prior to a dementia diagnosis, people have a heightened vulnerability to poor financial outcomes. Spending can certainly be one component of it," said Carole Roan Gresenz, a Georgetown University health management and policy professor and dementia researcher.

Sometimes, the spending problems show up as multiple purchases of the same clothing item because the person doesn't recall buying them repeatedly.

Other times, there are gifts or charitable contributions the person really can't afford.

In certain instances, the spending is for something the person doesn't need. A personal experience with this situation led Howard Tischler to launch the EverSafe tech platform protecting the finances of older adults.

His co-founder and Chief Operating Officer Liz Loewy recounted the story: "Howard and I started EverSafe after his mother had been sold an auto club policy when she was 80. She didn't own a car, was legally blind and didn't have a license."

Tischler's mother Harriet, who had cognitive issues, had stopped making her long-term care insurance policy premiums so she could pay for the $80-a-month auto policy and other things she didn't need, Loewy said.

"Her sons ended up paying for the long-term care, which cost nearly half a million dollars," Loewy noted.

In certain cases, a person known for making careful, researched spending decisions may become impulsive with dementia and the family may not realize it.

That happened with Gresenz's mother.

"She was very frugal in her spending her whole life," the dementia expert recalls. "Before she had any cognitive impairment, she was the kind of person who would have done checking, looked at the Better Business Bureau, done price comparisons."

But, she said, after her mom had dementia, "I noticed she made some decisions about repairs on her house that didn't make sense."

When someone recommended a person to make repairs, "she just signed up without doing her normal checking and it ended up being something that cost a lot of money," Gresenz said. "None of us were just paying enough attention at the time."

She noted: "Someone with dementia can make an unwise spending decision because they're having trouble thinking about how to weigh different alternatives or what the consequences of that decision making might be."

Then, the family can find itself on the hook.

On "The Conners," Beverly's granddaughter Darlene, played by Sara Gilbert, said: "Look, none of us wants to deal with this, but she's about to leave us a mountain of debt and if you haven't heard the expression: debt runs downhill."

Here's what you can do to stop excessive spending by someone with dementia and to take steps when such purchases have been made:

The best time to take preventive actions is before a parent or family member has cognitive impairment or dementia.

The two of you can ask your loved one's bank and brokerage to list you as a "trusted contact," notifying you if the financial firm sees anything looking irregular.

Brokerage firms are now required to ask for trusted contacts on certain accounts; banks are increasingly offering this option.

Reviewing your loved one's bank and credit card statements regularly, if you can, might let you detect red flags — purchases or charitable contributions that seem uncharacteristic or odd.

"Families should consider having a sit-down with mom or dad or loved ones and planning for a financial safety net," said Gresenz. "That can be walking through their credit cards and financial accounts and the kinds of debt that they're holding."

You can also try to get a durable power of attorney (POA), a legal document giving you the ability to make financial decisions for someone if they become unable to do so.

But many parents balk at giving their adult children this authority.

Some banks also won't honor power of attorney forms from external sources. "Banks and financial firms are still forcing people to get their own firm's POAs," said Loewy.

Another source of protection: Sign up for a service from a company that will monitor a loved one's financial accounts for you.

EverSafe analyzes daily transactions to identify unusual withdrawals and changes in spending patterns. It sends suspicious activity alerts by email, text, phone or through the company's app. The service costs about $76 a year for the basic service, with premium options running roughly $153 or $255 a year.

Its "trusted advocate" feature designates family members to receive alerts and assist in monitoring all of a loved one's financial accounts.

TrueLink ($144 a year) has a prepaid Visa debit card and spending monitor service with real-time alerts of recent purchases and reports that keep track of the person's spending history.

If you wind up finding that a parent or another loved one with dementia has begun making troubling purchases or donations, it can be hard getting help dealing with this.

"The powerlessness is something we tried to touch on" in "The Conners" episode, said Caplan.

A Power of Attorney, Stinchcombe said, won't let you get charges reversed. It might only let you cancel your loved one's credit or debit card.

You could try going to the retailer, credit card issuer or charity and explaining the situation.

You may get an empathetic response, cancelling all or some of the charges. "They might say, 'We'll reverse the charge as a courtesy,'" said Stinchcombe.

Alternatively, though, you may get little or no help.

"If your parent paid $6,000 for custom hearing aids they don't need, the merchant doesn't have an obligation to refund the money," Stinchcombe said.

A home-shopping retailer might cancel the purchase price of four garden gnomes your parent bought but require you to pay the shipping and handling costs to send them back, he added.

"The best case is if someone bought six pairs of the same shoes and you can take them back to the store," said Nicholas. "But in many cases, these things can't be recovered."

Loewy said many retailers will negate excessive spending by people with dementia when asked by concerned family members.

"Of course, with a timeshare, if the person has been paying for a while, you'll have a tougher row to hoe," said Loewy.

Stinchcombe said that if you call a credit card issuer to cancel mistaken repeated charitable contributions that, say, your mother made, you may be given two problematic alternatives.

"They will say: 'Was this purchase authorized?' " And if you say, 'Yes, she authorized ten-dollar charitable contributions once an hour,' they will say, 'Then we can't do anything about it. But if she doesn't have mental capacity, we have to close the account.' "

Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More