Today, people are living longer and fuller lives more than ever before. And while that is good news, the reality is that there often comes a time when older adults can no longer manage their personal business and finances.
When seniors cannot handle daily finances or become more susceptible to financial mistakes, the consequences can be severe—those who forget to pay bills can lose their home to foreclosure, get evicted from an apartment, risk utility shut-off, or destroy their credit. They can also fall victim to scams and get cheated out of large amounts of money.
So how can family members help when an aging parent or loved one begins to struggle?
Ideally, the best time to address this issue is before a parent or relative needs any help at all.
Rebecca Paul, Esq. Director of Fiduciary Services at Seniors At Home, a division of Jewish Family and Children’s Services, says, “The key to financial well-being for older adults is to plan ahead and avoid a crisis situation. The earlier you can put a plan in place, the better.”
Talk with the person about what will happen if and when they need help managing finances, and agree on some key events that might indicate that it is time for someone else to step in. Then come up with a plan as to how you will work together if and when that time comes.
Assess the Situation
If there is not already a plan in place, you’ll want to determine if the loved one currently needs help, and if they do, how much help is needed. If they do not want to have an open conversation about it, you can do some investigating.
- Take a look around their home. Do you see lots of unopened mail, bills scattered around, or piles of papers? Can they show you a filing system or describe how they manage their money?
- Do they know what bank accounts and investments they have?
- If you can, go through their checkbook, credit card statements, and bank statements. Look for anything unusual, including: double entries for the same item, odd transfers, or payments to questionable places.
- Ask them to explain large or odd payments (often, the explanation itself will give you an idea of their ability to handle their own financial affairs.)
- Do you see consistent entries for the mortgage, rent, and utilities in the checkbook or bank statement?
- Have they received letters from collection agencies?
- Have they been the victim of a telemarketing fraud, investment fraud, identity theft, or predatory lending?
- Is it clear that matters are in a disarray, yet they insist that they are taking care of things properly?
“If the answers to any of these are concerning, it’s time to act,” says Rebecca. “It is devastating when a person cannot take care of their finances. The question is, if they can’t, who will?”
Begin the Conversation
It is important to be sensitive when starting a conversation about the state of a person’s financial affairs. Remember that your loved one could be embarrassed that they are no longer able to look after things the way they used to, or afraid that by releasing control of their money they are losing their independence. These conversations can be difficult and emotional, but putting in the effort will make the situation more manageable if assistance is ever needed.
Involve the person in the decision-making process as much as possible. Explain your concerns and point out possible consequences if financial management is not done properly (such as foreclosure, closed accounts, or damaged credit). Work together on putting a plan together for the future.
Bring in a Professional
Managing personal finances, or making decisions on behalf of a loved one, can be challenging and can lead to great stress. In some cases, it can be a full-time job! This is when having a Professional Fiduciary step in can be especially important. Keep in mind that sufficient legal documents need to be in place in order for this to happen. This is where estate planning is key.
What is a Fiduciary?
A Fiduciary is a licensed individual who is entrusted authority on behalf of another person and is bound by fiduciary duty to act for that person’s benefit. If a Fiduciary is named as Power of Attorney or Trustee, they can in essence “step into the shoes” of the client to make the decisions that the client would have made, to the best of their knowledge. If not so named, a Fiduciary can still be of great assistance in managing the many details in order for the client or family member to make decisions.
With the largest team of licensed Fiduciaries in California, Seniors At Home’s Fiduciary Services team helps seniors, adults with disabilities, and their families to manage their financial responsibilities accurately and on time.
Rebecca says, “Fiduciary Services offer tremendous assistance for individuals who do not have family or friends who are able to help, or perhaps do not want to burden them with the overwhelming obligations of managing assets and property, organizing medical bills and coverages, and managing day-to-day obligations.”
Seniors At Home’s Fiduciaries and Care Managers work with other professionals (accountants, financial advisors, tax preparers, realtors, doctors, etc.) to help seniors and their families manage their responsibilities and—most importantly—plan for the future.
“People put their trust in Seniors At Home because, as a division of Jewish Family and Children’s Services, we are a stable and secure organization that has been around for decades. And that provides an incredible peace of mind.”
To learn more about our many services, including our Fiduciary Services, Advance Care Planning, Futures Program, or how to prepare for retirement, call our free information line at 415-449-3700 or click here to contact us.
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