In my last article Part One – When is it time to stop driving? We discussed warning signs from the National Highway Traffic Safety Administration, that the older adult may no longer be able to manage their own transportation needs. So, when it comes to managing finances, are there warning signs indicating when the senior should give up financial control? Simple answer, “absolutely” – but this will not be an easy conversation to have with anyone.
Part Two – When should our older loved-one give up financial control?
Research funded by the National Endowment for Financial Education (NEFE) identified the following five key warning signs of impaired financial skills in aging adults:
Taking longer to complete everyday financial tasks, such as organizing and paying bills
Showing reduced attention to details in financial documents, such as noticing that a bill is overdue
Decline in everyday arithmetic skills related to managing finances, such as calculating the correct change due as part of a cash transaction
Decreased understanding of financial concepts, such as understanding a medical deductible
Difficulty identifying risks in a financial opportunity, such as understanding risk in an investment scenario
Read the study here: https://www.nefe.org/research/research-projects/completed-research/2016/early-warning-signs-of-impaired-financial-skills.aspx
From personal experience, seeing numerous sticky notes or lists around the home is an indication that the person is having difficulty remembering tasks, including financial tasks.
Losing things like checks or checkbooks, statements or credit cards is also a red flag.
Knowing how to have a conversation about finances, without causing stress or an argument is honestly one of the most difficult things to navigate. I frequently hear “the kids just want to take everything” or “there’s nothing wrong with me and they have no business being in my business”. Patience, remaining calm, and great listening skills will help when you are trying to ask questions about your loved-one’s financial affairs.
Here are 8 tips to help keep seniors safe from financial risk:
Simplify financial transactions, such as consolidating bank accounts, putting regular bills on auto payment, and minimize the number of credit cards in use
Ensure all insurance policies are accounted for and paid up to date, consider health, auto, homeowner’s, long-term care, other personal property policies
Set up electronic statements, reduce the amount of financial mail coming by mail
Set up electronic monitoring, request online access for the power of attorney (or designate) to monitor credit card and banking accounts, and set up email or text alerts for transactions
Speak with your loved-one’s financial advisors, while these advisors will not give you information regarding accounts without permission, advising them of a potential problem can give them the heads-up for any strange activity or financial request
Reduce spam email and text messaging, put your loved-one’s phone number on the do not call list (https://www.donotcall.gov/), block unwanted phone numbers on cellphone, unsubscribe from email lists
Learn the laws of your loved-one’s state, know the rules of guardianship, power of attorney, and declaration of incapacity in the state of residence
When in doubt reach out, Care Managers specialize in assisting seniors and their families with these difficult concepts and have resources with which to provide direction
In my last article, I mentioned there are three common mistakes to avoid when the time comes to begin taking over finances, according to Forbes.
Those mistakes are:
Mistake #1: Failure to communicate
Mistake #2: Going to your aging parents’ bank with only that Power of Attorney document with your name on it and expecting it will go smoothly with just that document.
Mistake #3: Failure to look at your aging parent’s trust to see how it defines “incapacity.”
Read the full article here: https://www.forbes.com/sites/carolynrosenblatt/2021/11/15/taking-control-of-finances-for-aging-parents-avoid-these-3-common-mistakes/
In the last of my 3-part series on Is mom or dad safe to… I’ll explore some of the indicators of when it is time to consider other living arrangements for the older adult due to safety concerns.
Stay tuned for our next Blog: Part Three - What should we be looking for to determine if our older loved-one can CONTINUE TO live by themselves?
Comments