Barbara Macari's husband, Frank, always handled the investments in the family. Then one day, Frank, a real estate broker, gave his wife the shock of her life.
"I was coming down the stairs, and he came to me and said, 'I don't understand money anymore,' " Barbara said.
A couple of months later, Frank, 74, was diagnosed with Alzheimer's disease.
"He can no longer write checks," said Barbara, 72. "He doesn't even carry money with him because he doesn't understand it."
An estimated 5.1 million people age 65 and older have Alzheimer's disease or other dementias that eat away their ability to manage their financial affairs. With 10,000 people turning 65 every day for the next decade and half, the number of seniors dealing with cognitive decline is expected to keep rising.
That means that seniors, with a median household net worth of $170,500, will be more vulnerable to financial exploitation, whether it's a scam by crooks who prey on the elderly or theft by someone they trust.
"It's a huge problem," said Daniel Marson, professor of neurology at the University of Alabama at Birmingham. "Poor financial decisionmaking and financial exploitation, financial elder abuse are rampant."
It's easy to see why seniors are an easy mark for crooks.
"The seniors hold the majority of the wealth in this country," said Lynne Egan, chairwoman of the Committee on Senior Issues & Diminished Capacity at the North American Securities Administrators Association. "They've saved up for retirement, … they've sold a home to downsize, they've sold a business, they've inherited, and they're ripe for the plucking by the con artists."
In the financial realm, cognitive decline means a loss of "higher-order functional abilities" affecting a broad range of skills from counting coins to managing a checkbook, experts say. Loss of those skills can have severe consequences for seniors, who lose $36.48 billion a year to financial abuse, according to a study by True Link Financial. Even that may be conservative.
Mark and Kent Olds of Dallas said their 79-year-old mother, Gail, has dementia and was exploited by a caregiver who took about $7,500 from her.
"This lady took Mom to the credit union on two different occasions," Mark said. "Mom gave this lady $6,000, $7,000 one time, a grand another. We noticed a few other things missing before we could put the stops on it."
The financial losses of seniors aren't limited to what others do to them. They often hurt themselves by being too trusting and generous with their finances.
"When my mother was about 65 years old, she began giving money to anyone who asked, including those who just knocked on the door," said Tom Murphy, a Dallas certified financial planner. "She had always been a generous woman, but my father eventually realized something was wrong."
His father, also named Tom, eventually took the family and business checkbooks away from his wife, who was later diagnosed with Alzheimer's disease.
Worst possible time
The deterioration in financial skills couldn't come at a worse time for seniors, Egan said.
"Our ability to make financial decisions starts to decline at about the time it becomes more important that we protect our nest egg because we don't have time on our hands to earn back losses that may have occurred," she said.
Because of the potential for financial exploitation of seniors, outside institutions including banks, health care providers, lawyers and financial advisers have developed policies and training to detect telltale signs.
The Investor Protection Trust, a nonprofit investor education organization, works to educate doctors, nurses and other front-line medical professionals to recognize when their older clients may be vulnerable to or victims of financial abuse.
The organization supplies a pocket guide that suggests questions medical professionals should ask their elderly patients to determine financial capacity: Who manages your money daily? Do you run out of money at the end of the month? Do you regret or worry about financial decisions you've recently made?
Egan's group has made expanding and strengthening protection for senior investors a top item on its congressional agenda. She said it's sorely needed.
"We've got a population that's aging over time, so we're seeing a trajectory to a higher number as we move forward, as the baby boomers start to retire," Egan said. "It takes a while to get good policies and procedures and laws in place. We need to act now before it's too late."
Pamela Yip is a personal finance columnist for the Dallas Morning News.