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My 85 year old mother lives in a distant city, as does my brother. Both he and I are on a POA for her in case she needs us to manage her affairs, but as he is local and I am not, he is mostly the one who deals with it. She has always been funny about money, but she just called me worried that my brother is going to take her money and use it to buy a house. I think this is completely ridiculous, false, and defamatory as well! I have heard that this type of paranoia about money is common among some older people, but I am at a loss as to what to do, if anything. Since I do not live there, I cannot be the one that will have to take action if it comes to that. I also do not want her paranoia to ruin the relationship with my brother, as if he cuts her off, she will be truly alone. I should add that she has many times come to the brink of this due to her warped personality. I give my brother credit for continuing to look after her.

Any advice as to what I can do to alleviate any stress this could cause?

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Does your mother have dementia, or is this a long standing condition?
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She is becoming more forgetful, but I would definitely not call it dementia. She has always been money-hungry. It almost feels like she is projecting her greed onto my brother.
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Have you thought about an evaluation by a geriatric psychiatrist and/or a neurologist?
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If your brother is handling her finances, surely he's provided you with a yearly accounting...end of year balances on any/all of her accounts...showing how her money's been spent. Just re-assure her that all is well. It's not unusual for the elderly to get more concerned about their money. Most of us have saved a lifetime for rainy days.
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