Mom with dementia sued for card debt

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

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Question Dear To Her Credit,
My mother is 85 with dementia and has charged up her American Express card. My sister and I recently have taken steps to take over her finances and have moved her from a retirement community to live with me. She has been served a summons stating American Express is suing her. Do we have any options? -- Sasha


Dear Sasha,
By the time your mother receives a summons from American Express, things have progressed a long way already. The credit card company would try repeatedly to contact a person before it comes to that.

When an older person is sliding into dementia, however, it's easy for problems to be ignored for a time. Typically, at the first sign of problems, the older person is reluctant to let someone take over. They may be hostile or even fearful of letting go of control. The adult children may not want to mention to mom that she's forgetting things, or if they live far away, they may not know. And there's just no pleasant way to tell a person that they may not be able to handle their own finances anymore.

Based on what you have said, Steven J.J. Weisman, a Boston lawyer who specializes in probate and elder care matters, recommends that family members remove a parent's access to credit cards and financial accounts when the parent has dementia.

Your mother may not even be liable for some or all of the balance on her card. Weisman says, "Legally, if she was not of sound mind and did not understand what she was doing when she made the purchases, the bills could be contested as not being done as valid contracts."

In addition, several factors in this case can affect your mother's liability and your best course of action, including the extent of dementia and how long it has been going on, the amount of the debt, your mother's financial assets and what types of things your mother purchased.

To take further charge of your mother's financial matters, you could assert control by having her sign a legal durable power of attorney document. In it, your mother would cede financial control of her affairs to you or another person she trusts. Unfortunately, it may be too late for that, since if she has substantial dementia, she may not be able to understand her rights enough to sign them away legally. In that case, Weisman says, "The reader and her sister could be appointed as conservator for their mother to deal with her financial matters." The latter course would require a court order.

Assuming your mother has no financial assets that can be used to pay the debts, you may try to reach a settlement with the credit card company. If she has been buying things she didn't need, Weisman says that some of the items may be returned to the merchant as part of the agreement.

If your mother has no assets, including no house or other real estate, the credit card company can't collect money where there is none. Even if that is true, it's better to contact them and let them know what is going on. Ignoring debt is never a good strategy.

It's important that family members try to make sure a vulnerable person's money isn't lost through mismanagement, or that the parent isn't charging up enormous bills he or she will never be able to pay. You and your sister are doing the right thing by taking over and trying to straighten out financial matters for your mom.

See related: Parent with dementia and a $40,000 debt: Who's liable?, Steps to protect finances of those with Alzheimer's

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Updated: 11-21-2017