The ability to manage one’s own finances is among the first abilities that Alzheimer’s and other dementia disorders rob from their victims.

In fact, one of the earliest signs of some kinds of dementia is difficulty with basic financial tasks such as balancing a checkbook or paying bills on time. And as difficult and heartbreaking as dementia can be, the situation is made far worse when the loss of personal financial-management skills leads to financial catastrophes such as the inability to pay for food, rent and other primary expenses.

In contrast, according to a recent study from the Center for Retirement Research at Boston College, people with dementia who get money-management help from spouses, children or other caretakers are far less likely to suffer such terrible financial outcomes.

This is especially important now, considering that America’s 75 million baby boomers are aging rapidly yet living longer…and have had higher rates of divorce than previous generations, so that more live alone. By developing a financial-management plan for an elderly loved one early, families can protect dementia sufferers from self-inflicted financial ruin as well as predation from scam artists. What to do…

Know the signs and act quickly. The risk of being diagnosed with dementia increases dramatically with age, jumping from 3% between the ages of 70 and 74 to 30% for people age 85 and up. Since difficulty with simple financial tasks can be an early sign, don’t ignore it or assume it’s just “a fluke” if an older family member has trouble paying bills on time and properly, making withdrawals and deposits appropriately, and generally knowing what his/her financial situation is. Families should of course seek a medical diagnosis before jumping to any conclusions, but your next priority should be to discuss how money will be managed as your family member’s disease progresses.

Waiting too long to prepare for such a possibility can be tremendously disruptive. Yet about nine out of 10 people age 50 or older have never prepared or budgeted for providing financial support to other family members…or caring for an aging parent or relative, according to a study by Merrill Lynch and Age Wave that included a survey of more than 5,400 people.

By agreeing on and dividing up responsibilities (or hiring qualified professional assistance) early, the family can dramatically reduce the risk that the person with dementia will become destitute just when he or she needs comfort and security the most.

Types of arrangements. The vast majority of dementia sufferers who receive help with their money do so through informal arrangements with spouses or adult children. But more formal arrangements can make things easier. Example: The Social Security Representative Payee Program allows qualified third parties—often friends or family members of the person with dementia—to directly receive and manage a dementia sufferer’s benefits.