When is it the right time to begin managing an aging parent’s affairs? It is difficult for loved ones to know when to step-in and assist an aging parent with his financial and medical affairs. Conversations about money can be uncomfortable and parents may become suspicious or defensive when the topic is raised. They may resist doctor visits out of fear that their capacity is being evaluated. It is no wonder we resist having these conversations no matter how crucial they are. Unfortunately, as our loved ones age, they may lose the capacity to manage their financial and medical affairs and cognitive decline, coupled with isolation, can often make aging parents easy targets for elder abuse, specifically financial exploitation.
Family members should raise the topic of financial management for their aging parents before incapacity sets in or the signs of decline are visible. This allows the aging parent to fully participate in the discussion about managing his affairs.
Early intervention allows family members the opportunity to obtain a thorough understanding of an aging parent’s financial picture. What sources of income do your parents have? What financial institutions hold their assets? What are the account numbers? What are their recurring monthly bills? Where do they keep their important documents? Having this information readily available will help loved ones act quickly if an emergency arises. The ultimate goal should always be to preserve the aging parent’s autonomy and freedom. To ensure that an aging parent’s wishes are carried out, surrogate decision-making plans to address the possible future loss of physical or mental capacity should be developed. All estate plans should include planning for incapacity.
Aging parents can memorialize their wishes in binding legal documents, such as advance directives. They can designate an agent under a Health Care Proxy or other advance medical directive to assist with medical decision-making. A durable Power of Attorney can provide the aging parent with continued control over his financial affairs while also authorizing a loved one to step-in and assist when needed. Various other planning options that can address the financial affairs of an aging parent are inter-vivos trusts, family partnerships and LLCs. Advance health care directives, “life care plans,” and nominations of guardian are also important planning tools. Even if an aging parent is initially unwilling to address these issues, family members should continue to raise the topic. If no prior planning is done, family members will have to go to court to obtain a guardianship over the aging parent. The court determines the guardian’s decision-making authority and court approval is needed for all actions. Seeking guardianship is a long and arduous process, which can also result in a loss of privacy for the aging parent, as guardianships are recorded in public court files.
The decline in an aging parent’s ability to manage daily activities (such as refusing to bathe, wearing the same clothes for several days, uncharacteristically forgetful) may be an indicator that he is also having a hard time managing his financial affairs. While addressing these non-financial issues, loved ones should take the occasion to inquire whether the aging parent would like help with paying bills and other financial tasks. Immediate intervention is crucial if you see any signs of financial abuse. Elder abuse is largely unreported. Loved ones must be prepared to step in if they notice any signs that an aging parent is being financially exploited.
Some of the common signs that an aging parent may be the victim of financial abuse are sudden, unexplained bank withdrawals or wire transfers, large amounts of unopened mail, unpaid bills for food, medicine or utilities, changes in beneficiaries in a Will, retirement funds or other accounts, and the appearance of a new caregiver in the aging parent’s home.
If any of these warning signs are present, family members should immediately investigate and offer help, if needed. If there are multiple warning signs present, more aggressive action may be necessary to obtain control over the aging parent’s financial affairs.
Loved ones who lack the legal authority to intervene when these warning signs arise face a difficult task ahead without the commencement of a guardianship. Someone will need to act quickly. If the aging parent addresses these issues in advance, they will arm their loved ones with the legal authority to effectively step in and restore financial order.
These issues are complicated and generally involve and affect every member of the senior’s immediate family.
Elizabeth Valentin is a partner with the law firm of Littman Krooks and focuses her practice on elder law, guardianship, trusts and estates, special needs planning and asset protection. Liz is certified as an Elder Law Attorney by the National Elder Law Foundation. For more information visit littm