How to protect your aging parents' assets.
Anyone facing the strain of taking care of an aging parent knows that it’s one of the toughest jobs.
If their cognitive health is deteriorating, you will likely be put in the position of making increasingly important decisions over time.
And sometimes this happens much more quickly than expected.
The sad truth of it is that you must take extra precautions to protect your aging parents’ assets and make sure that they aren’t subject to abuse or fraud.
Here are some guidelines to help you prepare to secure your parent’s assets.
Learn about elder financial abuse & scams
Older adults, especially those with physical or cognitive impairments, are subject to financial exploitation in a number of ways, from outright scams to sleazy sales people looking to take advantage.
According to Bloomberg, elder financial abuse is on the rise, with some 1 million Americans losing over $500 million dollars in the US last year — and this is only an estimate of the cases which were actually dealt with by the Justice Department.
The National Adult Protective Services Association (NAPSA) lists the following ways in which seniors are commonly coerced:
- Outright theft
- Threatening phone calls
- Fraud schemes
- Unauthorized transfers of assets
- Lottery scams
- Electronic “phishing” for personal information
- Mortgage loan scams
- High fee investments
- Insurance scams
- Internet dating scams
- Work-from-home scams
Even if you don’t believe that your parents’ require protection at this point in time, you should still start to have conversations with them and try to start monitoring their activities. This should be a part of your caretaking strategy if you are a caretaker for someone with dementia.
Look for evidence of:
- Bills left unpaid
- Difficulties making simple calculations or making simple bank transactions
- Large or unusual withdrawals from bank accounts
- Unusual explanations about financial matters
- Giving or spending large amounts of money or valuables
- Transferring assets to unfamiliar parties
To help protect your parents from receiving fraudulent phone calls, you can put them on the national do not call registry, and make sure that they report unusual phone calls to you. You should also help them to manage their email and make sure they are opting out of mail lists.
If you suspect financial or other types of elder abuse, you can contact NAPSA to get help in your region.
Talk to your parents early
The decision to take over your aging parents’ assets is never an easy one, however, the earlier you have the conversations, the easier the transition will be.
It may seem daunting to have these kinds of conversations, but they need not be stressful. Start them loosely and gently, with phrasing such as:
“I’m starting to put together my will — is that something you have thought about?”
“If something were to happen to you, I’d like to make sure that your wishes are honored.”
“I want to make sure that your assets and financials are handled well into the future, and I know that you offered me power of attorney. Is this a good time to discuss that?”
The main thing is to ensure that they trust you as you move to get everything legalized as fast as possible.
Get a financial plan together ASAP
Once you have permission to help support your parents with their finances, you need to get a clear picture of where they’re at and who they are dealing with.
Obtaining a Durable Power of Attorney as early as possible is important when it comes to taking over their financial management. If your parents’ health is deteriorating, you’ll also want to ensure that you have a Medical Power of Attorney.
You will also want to make sure you have a clear understanding of who else in your family is able to legally sign for them.
Look for important documents such as:
- Wills and Trusts
- Power Of Attorney
- Medical Proxies (Power of attorney or other advanced directives)
- Financial Records: Statements and Bills
- Insurance Documents: Life, Medical, Property
- Tax Returns
- Rolodex: Look for the professional advisors (Investment, Bankers, Attorneys, Insurance)
Don’t wait until it’s too late and you’re sent into a tailspin trying to find their records. Make a list of all financial matters and ask where records are so you know where to find them quickly. Keep copies of all financial records in a safe, fully accessible place.
Accessing their private information in a legal, formal way may seem strange, but it’s vital for you to both plan and monitor their finances. And if your parents do not have a financial advisor who can help you, it may be a good idea to hire one.
Careful estate planning is essential
Financial elder abuse is a real problem, but you can protect your parents with smart asset management. Getting a plan in place can help you to avoid other hassles to do with estate management, such as delays in the probate process.
It’s not easy to be the primary caretaker of aging parents or other relatives. The best thing that you can do is make sure that all their estate and other assets are managed properly as early as possible.
Do you have If you have questions or need help about the probate process? We can help you understand, plan and streamline the process so that you can focus on what matters most.
Schedule a confidential call with us today.