If your elderly parents have worked hard and successfully accumulated assets, you’ll want to ensure that these and their finances remain protected. As your parents age, it can become increasingly challenging and sometimes impossible for them to continue managing their assets. They can risk assets, such as homes, cottages, bank accounts, and other investments, being lost to elder fraud and insurance companies if you don’t take the proper steps before it’s too late.
Your elderly parents will likely need these assets to manage healthcare costs and pay for assisted living arrangements. While pop culture may provide some extreme examples, elder fraud is actually widespread. According to a 2018 Bloomberg report, $37 billion a year is stolen from America’s elderly.
Even if your parents are of sound mind but just want help managing their finances, the steps in this guide will help you safeguard your elderly parents’ assets.
Early Signs That Asset Protection Is Needed
Older adults with mild cognitive impairment—such as mild memory loss—can often continue managing everyday financial tasks. However, if they start to struggle with more long-term thinking, such as knowing what steps to take when a certificate of deposit is up for renewal or managing online investing, they may need help managing their finances and protecting their assets. Difficulty concentrating and memory loss could be early signs that your parents’ ability to manage their assets is compromised.
The following signs can indicate that your parents are having difficulty managing their finances:
- Difficulty balancing a checkbook, keeping track of financial documents, or calculating change
- Unpaid or late payments for bills resulting in angry landlords or loss of utility services
- Missing calls from the bank or forgetting to return them
- Missing money or suspicious bank account transactions
- Unusual purchases or merchandise at home
Dementia and Asset Protection
When your elderly parents begin struggling with their finances, it may be a sign that they have Alzheimer’s disease or another form of dementia. In 2021, Alzheimer’s disease affected an estimated 6.2 million Americans aged 65 and older, according to the Alzheimer’s Association’s annual report. Seventy-two percent of those affected are aged 75 or older.
Still, many elderly Americans continue to handle their financial decisions and money management completely alone. This trend can set them up for the increasing threat of elder financial abuse.
Best Ways to Protect The Elderly’s Assets
Older adults with early-stage dementia are especially vulnerable to elder financial fraud. Once you recognize the signs that your elderly parents are struggling to manage their finances and assets, take the following steps to protect them.
Talk With Your Parents
If your parents exhibit early signs of dementia or indicate they no longer want the responsibility and stress of managing their assets, take time to talk with them about protecting their assets immediately. You may wish to enlist the help of a professional elder-law specialist or financial advisor.
Educate them about online and telephone scammers and add them to the National Do Not Call Registry to block telemarketers and scam calls. According to a 2020 Federal Trade Commission report on protecting older consumers, nearly 90% of consumer reports filed with their Consumer Sentinel Network by a third-party on behalf of people 80 and over were about a scam that began with a phone call. This statistic indicates that your outside assistance could be highly effective for recognizing and reporting fraud and stopping it before it’s gone too far.
Organize and Gain Access to Personal and Financial Records
Receive permission from your parents to access their personal information and financial documents to ensure they are in order. This access should include their financial and investment accounts, such as bank accounts, credit cards, mortgages, and others related to assets.
Assign a Trusted Guardian and Establish a Power of Attorney
If your parents need help managing their assets, consider becoming their guardian or electing another family member to the role. A Power Of Attorney (POA) allows the holder or agent to legally act on another person’s behalf and manage their assets when they are no longer able or no longer wish to do so. This protection can significantly reduce the possibility of legal actions that can threaten their assets. If your parents already have an assigned POA agent, organize the corresponding documents for future access.
Set Financial Limits and Safeguards
Check your parents’ monthly bank statements for suspicious-looking charges. If your parents use a debit or credit card, consider setting a daily spending limit so any fraudulent activity can be more easily recognized. To relieve the stress of expense management, with their permission, have your parents’ regular financial payments taken care of through automatic payments.
If you create a living trust for your parent’s estate and assign a trustee, the trustee can provide further guidance on how best to manage your parents’ assets and protect them from fraud when they no longer can protect themselves.