Early in my financial planner career I worked for a firm with a 75-year old client who had become a recent widow. A phone scammer had gotten hold of her and was persuasive enough to convince her to send a hundred dollars in gift cards to an address in the Caribbean. That one indiscretion resulted in the floodgates opening up. She started receiving dozens of junk mail requests and phone calls each day and began to respond to many of them. By the time we had become aware of the situation she had given away more than $5,000 to questionable if not outright fraudulent organizations. Her financial decision-making had become so impaired that we notified her adult son, who initially changed her phone number and arranged to have her mail routed to him to screen out the junk. Things got to the point where he reached out to Santa Clara County’s Adult Protective Services to see about getting better control of her finances. The end result was a conservatorship giving him full power to manage her finances for her. Ironically (and sadly) her mental faculties further declined to such an extent that she believed he – rather than the scammers – was taking financial advantage of her. Her faithful son kept her financially secure, but she went to the grave thinking he was a crook.

Every state and many counties have Adult Protective Services (APS) agencies. It’s their responsibility, among other things, to investigate reports of senior financial exploitation. But how can agency workers determine whether or not the adult still has the mental capacity to be able to make their own decisions about their finances, particularly when those decisions are ones that their financial adviser or family may disagree with? APS agencies are not only chronically understaffed but are also responsible for a host of other types of assessments.

That’s where a new training program called the Interview for Decisional Abilities (IDA) comes into play. It was developed by two geriatric doctors, Mark Lachs at Cornell University and Jason Karlawish at the University of Pennsylvania. IDA is a standardized interview process that improves APS workers’ ability to assess whether or not a senior is able to understand the risks and potential consequences of the financial decision they’re making. The IDA focuses on three fundamental questions about the risks of a particular situation: “Do you recognize that this happens? Do you think that this could be happening to you? Can you come up with a plan to address it, reasoning through and weighing the upsides and downsides?”

As Lachs points out, people have the right to make bad decisions. But if a senior is referred to APS, and a case worker discovers that the senior does not grasp the ramifications of some decision, the next step might be a referral to a psychiatrist for a fuller professional assessment before taking action to restrict the senior’s financial activities.  

Numerous studies have shown that cognitive impairment – especially with respect to financial concepts – increases with age. Coupled with longer lifespans thanks to improved medical care, seniors now face a significantly higher threat of financial exploitation than in the past. Tools and techniques such as IDA – that improve government agencies’ ability to protect citizens without unduly limiting their rights – would appear to be a welcome addition to the support services available to seniors.