Financial capacity is a medical and legal construct that encompasses one’s ability to manage finances in accord with personal values and self-interest (Marson, 2013). It is an important topic for neuropsychologists because older adults may be particularly susceptible to financial exploitation due to biological, medical, cognitive, psychological, and social factors (Lachs & Han, 2015). Financial exploitation of older adults is disturbingly common, and the scale of the losses is staggering, most recently estimated at $36 billion annually (Orlov & True Link Financial, 2015). Notably, the presence of neuropsychological data may increase the likelihood of prosecution in financial abuse cases (Wood et al., 2014).
Although laws vary by state and type of financial decision, several conceptual models and tools to assess financial capacity clinically have been proposed (Lichtenberg, Stoltman, Ficker, Iris, & Mast, 2015; Marson et al., 2000; Pachana et al., 2014). In general, the examiner must evaluate the following aspects relating to financial decisions: 1) communication of personal choice, 2) financial understanding, 3) appreciation of potential consequences, and 4) clear reasoning in decision-making (Assessment of Older Adults with Diminished Capacity: A Handbook for Psychologists, 2008).
Regarding the neuropsychological correlates of financial decision-making, in a sample of demented and non-demented older adults, arithmetic ability was most strongly associated with financial capacity, followed by measures of executive function and verbal memory (Sherod et al., 2009). Unsurprisingly, there is strong support for decreased financial capacity among people with dementia (Marson, 2001), and these deficits appear to increase with disease progression in cases of mild Alzheimer’s disease (Martin et al., 2008). Impairments in higher-order skills may be evident sooner in disease progression: mild cognitive impairment is associated with decreased financial knowledge (Han, Boyle, James, Yu, & Bennett, 2015), and subtle decline among cognitively healthy older adults is associated with poor decision-making (Boyle et al., 2012).
Grey matter correlates of susceptibility to scams in community-dwelling older adults
Susceptibility to scams is a significant issue among older adults, even among those with intact cognition. Age-related changes in brain macrostructure may be associated with susceptibility to scams; however, this has yet to be explored. Based on previous work implicating frontal and temporal lobe functioning as important in decision-making, we tested the hypothesis that susceptibility to scams is associated with smaller grey matter volume in frontal and temporal lobe regions in a large community-dwelling cohort of non-demented older adults. Participants (N = 327, mean age = 81.55, mean education = 15.30, 78.9 % female) completed a self-report measure used to assess susceptibility to scams and an MRI brain scan. Results indicated an inverse association between overall grey matter and susceptibility to scams in models adjusted for age, education, and sex; and in models further adjusted for cognitive function. No significant associations were observed for white matter, cerebrospinal fluid, or total brain volume. Models adjusted for age, education, and sex revealed seven clusters showing smaller grey matter in the right parahippocampal/hippocampal/fusiform, left middle temporal, left orbitofrontal, right ventromedial prefrontal, right middle temporal, right precuneus, and right dorsolateral prefrontal regions. In models further adjusted for cognitive function, results revealed three significant clusters showing smaller grey matter in the right parahippocampal/hippocampal/fusiform, right hippocampal, and right middle temporal regions. Lower grey matter concentration in specific brain regions may be associated with susceptibility to scams, even after adjusting for cognitive ability. Future research is needed to determine whether grey matter reductions in these regions may be a biomarker for susceptibility to scams in old age.
Han, S. D., Boyle, P. A., Yu, L., Arfanakis, K., James, B. D., Fleischman, D. A., & Bennett, D. A. (2015). Grey matter correlates of susceptibility to scams in community-dwelling older adults. Brain Imaging Behav. doi: http://dx.doi.org/10.1007/s11682-015-9422-4
Mickey Rooney, Actor and Elder Abuse Victim, Testifies in the US Senate
Elder Financial Abuse Webinar Series from the National Center for Victims of Crime
Prosecution of Financial Exploitation Cases: Lessons from an Elder Abuse Forensic Center:
In this presentation, Dr. Adria Navarro and Dr. Kathleen Wilber discuss findings from their study that examines effectiveness when APS uses a novel multidisciplinary team (MDT)—an elder abuse forensic center—to increase prosecution of elder financial abuse crimes. Findings from this study of APS recipients between 2007-2009 found a ten times greater likelihood of cases being submitted to the District Attorney's office. The researchers shared the process used by the forensic center team to determine whether prosecution should become a case goal.
Financial Decision Making and Financial Exploitation: Assessment Issues in Older Adults
Lichtenberg, P. A. (2014). Financial Decision Making and Financial Exploitation: Assessment Issues in Older Adults. Retrieved from http://info.maxwell.syr.edu/asi/PeterLichtenbergPolicyBrief/
Assessment of Older Adults with Diminished Capacity: A Handbook for Psychologists
American Bar Association Commission on Law and Aging and American Psychological Association. (2008). Assessment of Older Adults with Diminished Capacity: A Handbook for Psychologists. Washington, D.C. Retrieved from http://www.apa.org/pi/aging/programs/assessment/capacity-psychologist-handbook.pdf
Boyle, P. A., Yu, L., Wilson, R. S., Gamble, K., Buchman, A. S., & Bennett, D. A. (2012). Poor decision making is a consequence of cognitive decline among older persons without Alzheimer's disease or mild cognitive impairment. PLoS One, 7(8), e43647. doi: http://dx.doi.org/10.1371/journal.pone.0043647
Han, S. D., Boyle, P. A., James, B. D., Yu, L., & Bennett, D. A. (2015). Poorer Financial and Health Literacy Among Community-Dwelling Older Adults With Mild Cognitive Impairment. J Aging Health, 27(6), 1105-1117. doi: http://dx.doi.org/10.1177/0898264315577780
Lachs, M. S., & Han, S. D. (2015). Age-Associated Financial Vulnerability: An Emerging Public Health Issue. Ann Intern Med. doi: http://dx.doi.org/10.7326/M15-0882
Lichtenberg, P. A., Stoltman, J., Ficker, L. J., Iris, M., & Mast, B. (2015). A Person-Centered Approach to Financial Capacity Assessment: Preliminary Development of a New Rating Scale. Clin Gerontol, 38(1), 49-67. doi: http://dx.doi.org/10.1080/07317115.2014.970318
Marson, D. C. (2001). Loss of Financial Competency in Dementia: Conceptual and Empirical Approaches. Aging, Neuropsychology, and Cognition (Neuropsychology, Development and Cognition: Section B), 8(3), 164-181. doi: http://dx.doi.org/10.1076/anec.22.214.171.1247
Marson, D. C. (2013). Clinical and ethical aspects of financial capacity in dementia: a commentary. Am J Geriatr Psychiatry, 21(4), 392-390. doi: http://dx.doi.org/10.1097/JGP.0b013e31826682f4
Marson, D. C., Sawrie, S. M., Snyder, S., McInturff, B., Stalvey, T., Boothe, A., . . . Harrell, L. E. (2000). Assessing financial capacity in patients with Alzheimer disease: A conceptual model and prototype instrument. Arch Neurol, 57(6), 877-884. Retrieved from http://www.ncbi.nlm.nih.gov/pubmed/10867786
Martin, R., Griffith, H. R., Belue, K., Harrell, L., Zamrini, E., Anderson, B., . . . Marson, D. C. (2008). Declining financial capacity in patients with mild Alzheimer disease: a one-year longitudinal study. Am J Geriatr Psychiatry, 16(3), 209-219. doi: http://dx.doi.org/10.1097/JGP.0b013e318157cb00
Orlov, L., & True Link Financial. (2015). The True Link report on elder financial abuse 2015. Retrieved from https://truelink-wordpress-assets.s3.amazonaws.com/wp-content/uploads/True-Link-Report-On-Elder-Financial-Abuse-012815.pdf
Pachana, N. A., Byrne, G. J., Wilson, J., Tilse, C., Pinsker, D. M., Massavelli, B., . . . Mitchell, L. K. (2014). Predictors of financial capacity performance in older adults using the Financial Competence Assessment Inventory. Int Psychogeriatr, 26(6), 921-927. doi:http://dx.doi.org/10.1017/S1041610214000209
Sherod, M. G., Griffith, H. R., Copeland, J., Belue, K., Krzywanski, S., Zamrini, E. Y., . . . Marson, D. C. (2009). Neurocognitive predictors of financial capacity across the dementia spectrum: Normal aging, mild cognitive impairment, and Alzheimer's disease. J Int Neuropsychol Soc, 15(2), 258-267. doi: http://dx.doi.org/10.1017/S1355617709090365
Wood, S., Rakela, B., Liu, P. J., Navarro, A. E., Bernatz, S., Wilber, K. H., . . . Homeier, D. (2014). Neuropsychological profiles of victims of financial elder exploitation at the los angeles county elder abuse forensic center. J Elder Abuse Negl, 26(4), 414-423. doi: http://dx.doi.org/10.1080/08946566.2014.881270