How to Protect your Parents

Our clients received a copy an article on how to protect your parents written by S&P Capital IQ Financial Communications[1].  What follows is a synopsis.  

Disreputable telemarketers, investment brokers, and charitable agencies, and others often target senior citizens. Elder abuse is estimated by one study to result in $2.9 billion in annual financial losses[2]. Another estimated that the average senior victim of financial abuse loses $140,500.[3] So how can you help your parents or other elderly loved ones avoid becoming the victim of a scam? Some suggestions include:

Look for clues. Are your parents having difficulty managing their money? Have they stopped paying their bills or are they often delinquent? Are they overbuying or over giving? Talk to your them about their situation. Determine if they can maintain a certain level of independence, but tell them they may need assistance, and you are willing to help.

Get outside help. Consider speaking to their primary care physician, or bring in a geriatric care manager, who can help you assess the mental clarity of your loved ones. Local care managers can be found at www.caremanager.org or at www.eldercare.gov.

Assess their financial status. Review your parents' tax records, bank and investment statements, and credit card accounts. Have them share with you their account numbers and online passwords and keep a safe set of records. Set up a meeting with their financial advisor and review their investments for suitability.

Bring in additional family members, if necessary, and plan. Consider getting a durable financial power of attorney, which would allow you (or someone else) to make financial decisions for your parents if they can’t. Make sure they have a will and that it reflects their current wishes. Make note of any health care proxies or life insurance policies. If you do take over your parents' finances, be careful:  if you co-sign for a loan or credit card, you become responsible for paying it off if your parents cannot or if they die. Better to have them grant you third-party access to their accounts. You could even arrange to have an alert sent to you if their charges go above a certain amount. Instead of opening a joint bank account, consider having a joint signature on the account instead. This way you'll be able to sign checks to pay their bills, but the account remains in their names. You can also request to have alerts sent to you if there are any lapses in payments.

Check our website (www.regencywealth.com) for additional life and investment suggestions and call us (201-447-5850) if you need our assistance.

[1]
S&P Capital IQ Financial Communications [2] Source: MetLife, "The MetLife Study of Elder Financial Abuse," June 2011. [3] Source: Certified Financial Planner Board of Standards, "2012 Senior Americans Financial Exploitation Study," August, 2012.