Asset Protection For Seniors

Did you know that half of all seniors over the age of 65 are still managing their own finances?  Unfortunately, seniors become easy targets for financial abuse and elder fraud.  If you suddenly notice your loved one struggling with finances, this could be the first sign of dementia or early-onset Alzheimer’s. It is important to communicate with your parent or grandparent regarding their finances. There are many hackers and scammers who prey on the elderly. When speaking with a senior loved one, it’s important to teach them to never download anything based on the advice of a stranger on the phone or provide their login information to anyone.  As a senior, you or they are at risk for financial fraud. Your family can help you protect yourself from these predators.  Let’s take a further look at how.Memory loss, concentration issues, difficulty staying organized are signs of early dementia.

Memory loss, concentration issues, difficulty staying organized are signs of early dementia.  Watch for these and other signs in your loved one’s behavior: inability to balance their checkbook, unable to make a change at the cash register, unable to keep financial documents in order, unpaid bills, collection, and disconnect notices, missing money missing from accounts, unusual purchases or new items at home. If you feel your loved one is or becoming cognitively impaired, get involved immediately in their day-to-day life, particularly their finances to ensure they are not taken advantage of.  There are steps you can take to make sure your loved one is protected from financial loss.

Here are ten things you can do to make sure your loved one is protected from financial loss:

Step one is to have a conversation with them as soon as you notice a cognitive change. Reassure them that you want to make sure they are financially safe and have everything they need.  Sit together and make a list of their wishes.  Put them in writing and update them if necessary, later on.  This can sometimes be difficult because of the feeling of loss of independence and control.

Step two is to begin blocking all spam/scam calls to their phone. Scammers will often use a local phone number that shows on the caller ID. They will try to sell something or tell you that you’ve won something in order to get you to provide a credit card or bank account number.  You can add your phone number(s) to the National Do Not Call Registry at https://www.donotcall.gov.

Step three is to sign up for free credit reporting.  There are three consumer credit reporting agencies.  They are Equifax, Experian, and TransUnion.  All three are required by federal law to provide you with a free credit report once every twelve (12) months upon request.

Step four is something that may be somewhat more difficult for seniors.  Setting up automatic payments might be a little intimidating to your elderly loved one but is an option that allows you to monitor their accounts.  They are used to writing a check every month for their bills, putting a stamp on the envelope, and taking a walk to the mailbox.  You can set up automatic payments for most of their bills and ensure that no payments are missed, and no utilities are disconnected.Step five is to set a daily spending limit on all card purchases.

Step five is to set a daily spending limit on all card purchases.  This protects them from buying unnecessary items and can alert them to potential fraud on their accounts.  If there is a pattern of trying to spend more than their limit, sign them up for prepaid debit cards that they can use anywhere.  This prevents overspending and reduces the potential for financial fraud.

Step six can be a difficult decision for senior loved ones.  Joint bank accounts can have many pros and cons.  On the pro side, you can keep track of your loved ones spending and potentially fraudulent activity. On the con side, it can lead to tension as seniors feel that they are losing control of their money.  No two situations are the same and a joint bank account might not be appropriate.

Step seven is to talk with your loved one.  When they pass away, the estate will be your responsibility.  Ask them about their estate and their wishes for the future of their estate.

Step eight is to involve a financial planner.  You and your loved one can consult a financial planner to ensure that their savings are being properly managed and earning a reasonable rate of return.  You will gain insight into whether there is sufficient funding for future long-term care needs.

Step nine involves designating a power of attorney.  A power of attorney is someone who will act on their behalf when they can no longer take care of financial decisions or transactions.  The designated attorney in fact will be able to handle their finances and make medical decisions on their behalf for example.  Specific authorities are stipulated for decisions such as financial, insurance, or real estate-related transactions. You can have an attorney draft the power of attorney or attorney in fact document but there are also legal websites available that state-specific templates.  Once completed, this form must be notarized and given to all of the institutions your loved ones does business with.  This will let them know that you have the authority to transact or make decisions on their behalf.Step ten involves establishing a living trust.

Step ten involves establishing a living trust.  A living trust is basically an outline, or a guide, on how to manage your estate if you become incapacitated.  This must be in place as many of the other documents we have discussed in this article before your loved one declines cognitively.  Additionally, they should participate in making the decisions associated with a living trust.  The trustee’s role is to uphold the stipulations set forth in the living trust.

Taking control of your loved one can be difficult for both of you.  While it can feel overwhelming, proper planning will help reduce the stress. Communication with a loved one or your parents will give them comfort that their estate and their finances are safe.  If they are still taking care of their own finances, educate them on ways to avoid fraud.  If they are unsure of something, tell them to have the person talk to you before they give out any sensitive information.  Be on the lookout for signs of cognitive decline and as always be ready and willing to step in to help.

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