Forget about the car keys, do you know when to take away your parent's checkbook?

"Financial capacity has emerged as a key activity of daily living in understanding functional impairment and decline in patients with mild cognitive impairment -- or MCI -- and dementia," said Daniel Marson, Ph.D., J.D., professor in the Department of Neurology and director of the Alzheimer's Disease Center at the University of Alabama at Birmingham. "The capacity to manage one's own financial affairs is critical to success in independent living. Impairments in financial skills and judgment are often the first functional changes demonstrated by patients with incipient dementia. And breakdowns in financial management skills can be devastating."

Patients with MCI typically still are functioning in the community with focal memory or other cognitive impairments but are beginning to show initial signs of functional decline. Since 2000, Marson and his group have published a number of empirical studies detailing impairments of financial skills in patients with MCI and Alzheimer's disease.

At an October symposium organized jointly by the Massachusetts Institute of Technology AgeLab and Transamerica called "Financial Planning in the Shadow of Dementia," Marson presented five clinical warning signs of financial decline that family members and caregivers of elderly persons should recognize. Marson noted that these warning signs should represent changes from the older person's prior baseline financial skills.

• Memory lapses, such as forgetting to pay bills or taxes, or paying bills twice.

• Poor organization of financial information flow, where a previously neat desk is now in disarray and disorganized. An individual might be confused about when an activity transpired, and mail might not be opened in a timely manner.

• Math mistakes in everyday life, such as figuring out a tip, balancing a checkbook or needing help with the steps of a calculation.

• Confusion, such as an erosion in the ability to comprehend basic financial concepts.

• Impaired financial judgment, particularly a new interest in get-rich-quick schemes. A classic sign is that the person would not have considered the scheme five years ago and is now listening and interested. Another sign is unrealistic anxiety about personal finances.

In response to these changes, Marson suggests that caregivers can oversee an older person's checking transactions, contact the bank to detect irregularities such as bills' being paid twice, or become co-signers on a checking account so that joint signature is required for checks above a certain amount. Online banking and bill-payment services are additional options for families.

In 2009, Marson and his group published a major paper on declining financial capacity in MCI and progression to Alzheimer's, which involved a tool developed at UAB called the Financial Capacity Instrument. The FCI measures financial skills across 20 tasks, including making investment decisions, understanding a bank statement, balancing a checkbook, paying bills, preparing bills for mailing, and counting coins and currency.