Most older adults will require additional support and care as they age. Whether a senior is experiencing chronic health conditions, memory loss or a general decline in health, they may rely on their adult children or family members for assistance. In fact, according to the National Alliance for Caregiving and AARP, nearly 41.8 million caregivers are caring for adults ages 50 and older, a number that has grown by 16% in the last five years.
While caregiving refers to the act of providing physical and medical support, there are other factors involved, especially for family members. The question may arise of how to manage an elderly parent’s finances if they lose the cognitive ability to do so themselves. According to an article published by USA Today, nearly 92 percent of caregivers are paying bills from their loved one’s accounts, monitoring their bank accounts, handling insurance claims and taxes, and managing their investments. While initiating a conversation about finances with your aging parents is difficult, it can ultimately protect them from financial elder abuse or identity theft.
Signs It’s Time for a Financial Caregiver
Are you wondering how to manage your elderly parent’s finances? Whether you understand your loved one’s financial situation or not, several warning signs suggest it may be time to appoint a financial caregiver:
● Excessive phone calls. The next time you visit your loved one in-person, consider checking their caller ID logs to see if creditors or credit card companies are contacting them regarding unpaid bills. Keep track of unknown numbers, unverified charitable organizations soliciting donations and any new “friends” asking for favors or loans.
● Unpaid bills. Stacks of unopened or unsorted mail may suggest that your aging parent is falling behind with their bills. Look for statements from credit card companies and notices from the Internal Revenue Service.
● Misuse of cash and checks. Look at your loved one’s checkbook to see if they are paying their bills and/or balancing their accounts properly. If your loved one doesn’t know where they leave their cash, ignores unpaid bills or has bounced checks, it could be time for someone to step in and help.
● Increased spending. If your aging parent is spending a lot of money on things around the house, on entertainment, or gifts for other people, you should address the situation immediately. Sudden irrational spending can be a symptom of memory loss, Alzheimer’s disease, or other forms of dementia.
Types of Financial Caregivers
Financial caregiving generally involves paying bills, making deposits, handling insurance and benefit claims, assisting with savings and investment decisions, managing tax preparation and other financial duties. There are several types of financial caregivers and each has the legal authority to make decisions on behalf of those who can’t. Here are a few of the most common types of financial caregivers:
Power of Attorney
A power of attorney gives authority to another person to make decisions on your behalf when you are unable to make them yourself. A person with power of attorney has the right to access your bank accounts and sensitive information. This can be an essential tool, especially in times of declining health or emergency. According to AARP, there are three main types of powers of attorney:
Trustee
When an individual is named a trustee of a revocable living trust, their authority only applies to property noted within that trust. Trustees have the responsibility to manage and distribute the trust’s assets as instructed within the document.
Federal Benefits Fiduciary
This authorization allows an agent to accept and manage federal government benefit payments, such as Social Security, on behalf of the beneficiary. The appointed fiduciary must keep detailed records and file reports stating how the funds were used.
Tips for Financial Caregivers
Adult children are often unprepared for how to manage an elderly parent’s finances. In some cases, taking responsibility for a loved one’s finances can feel like a full-time job. Here are some tips to help financial caregivers guide their loved ones when they are not able to manage their finances themselves:
● Prepare documents early. It’s never too early to appoint a power of attorney. As your parents or loved ones are near retirement age, it’s important to initiate a conversation about their finances.
● Encourage fiscal stewardship. Connecting with investment professionals and accountants can help you make informed decisions regarding your loved one’s finances. As long as it’s appropriate, financial caregivers should involve their loved ones in long-term financial planning and help keep them connected with their financial advisors.
● Consider automatic payment or direct deposit. Financial caregivers can set up monthly payments from their loved one’s bank accounts to automatically pay utilities, mortgage payments and insurance fees on the same day each month. Receipts can be sent to an email address which allows caregivers to ensure bills are paid accurately and on time.
How to Safeguard an Elderly Parent’s Finances
Each year millions of older adults are targets of financial exploitation, often referred to as elder fraud. In fact, according to a 2020 report, elder fraud in the United States has grown by 10 percent, rising to 8.68 million cases each year. Sadly, financial elder fraud is often committed by individuals with close connections to older adults, such as family members.
To protect seniors from fraud, experts suggest appointing a trusted financial caregiver to manage a loved Each year, millions of older adults are targets of financial exploitation, a form of elder abuse that often one’s finances, and look for signs of fraud and exploitation. Seniors or their family members should also consider appointing a trusted contact for their bank accounts. These trusted contacts will be notified of any suspicious or questionable activity on the account. Financial caregivers can also set up services, such as EverSafe and LifeLock, that track bank accounts, investments, and credit cards. In addition to appointing a financial caregiver, those who remain socially connected to others lower their risk of falling victim to elder abuse.
Maplewood Senior Living: Protecting Your Loved One
Financial scammers frequently target elderly adults because they know they’re more likely to have large retirement savings. They prey on lonely, isolated seniors, or those who are vulnerable or easily manipulated because of dementia or other cognitive impairments.
At Maplewood Senior Living Communities, around-the-clock security protects seniors from unwanted door-to-door solicitations. Staff members and caregivers pass background checks to ensure their honesty and trustworthiness, and they’re trained to spot any signs of elder fraud, including indications your loved one is being bullied or tricked into parting with their money.
Additionally, your loved one won’t be lonely or isolated thanks to ample opportunities for social interaction and information-sharing on campus. We ensure residents are kept up to date with the latest tips on how to protect their identity and finances, including alerting them to seasonal scams and teaching them how to protect themselves online. Because we’re ever-vigilant, families can have peace of mind that their loved ones are safe and have access to the support they need. To learn more about our offerings or to schedule a tour, please contact us.
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