How to Manage and Protect Your Loved One’s Finances: Tips for Families
As our loved ones age, managing their finances can become an increasingly complex and sensitive task. Whether due to cognitive decline, physical limitations, or simply the challenges of navigating modern financial systems, many seniors may need assistance in managing their financial affairs. However, with this responsibility comes the potential for financial abuse, fraud, and exploitation. As an elder law firm dedicated to safeguarding the well-being of seniors, we understand the importance of ensuring that your loved one’s finances are protected and well-managed.
In this blog, we will offer general and practical tips for managing your loved one’s finances, helping to prevent financial scams, and how to help maximize financial security in the later stages of life.
- Assess Their Financial Situation
Before you take any steps to assist your senior loved one with their finances, it’s important to gain a clear understanding of their financial situation. Here are some key areas to assess:
- Income and Expenses: sit with your loved one to review all sources of income, such as Social Security, pensions, or income remitted from retirement accounts. We also suggest you try to get an overview of monthly expenses, including bills, insurance premiums, and any other financial obligations.
- Assets and Liabilities: Determine the value of any properties, savings, investments, and debts. This can help you assist your loved one with making informed decisions about managing their finances.
- Legal Documents: Ensure that all important legal documents are up to date, including a will, trust, durable power of attorney (DPOA), and healthcare directives. These documents can provide clarity on your loved one’s wishes and offer you the authority to manage their financial and healthcare decisions, if needed.
- Establish a Durable Power of Attorney (DPOA)
One of the most important tools for managing a loved one’s finances is the durable power of attorney (DPOA). This legal document designates a trusted person (often a family member) to manage financial decisions on behalf of their loved one if they become incapacitated or are no longer able to handle their finances.
A DPOA can help protect your loved one from financial exploitation by giving you legal authority to oversee their financial matters and ensure their financial interests are well taken care of. It is essential that the person designated is trustworthy, financially responsible, and understands the importance of acting in another’s best interest.
- Monitor Accounts and Financial Transactions
Seniors are often targets of financial scams, fraud, and abuse. As a family member or caregiver, it’s essential to stay vigilant and monitor their financial accounts regularly (if you have proper legal authority). Here’s how to help protect their finances:
- Review Bank Statements: Check bank statements monthly for any suspicious activity, including unfamiliar transactions or sudden large withdrawals.
- Sign Up for Alerts: With proper authorization, many banks and credit card companies offer transaction alerts, which can notify you and your loved one when a purchase is made, or a withdrawal occurs.
- Avoid Financial Scams and Fraud
Seniors are frequently targeted by people who prey on their trust, vulnerability, and lack of familiarity with modern technology. Here are some tips to help protect your loved one from scams:
- Educate About Common Scams: Inform your loved one about the most common scams targeting seniors, such as lottery scams, fake charity solicitations, phishing emails, and fraudulent investment schemes. Remind them to never give personal information over the phone or online, especially if they didn’t initiate contact.
- Encourage Caution with Unsolicited Calls or Emails: People can often impersonate government officials, family members, or businesses to pressure seniors into handing over money or information. Advise your loved one to hang up on unsolicited calls, not answer unknown numbers, or delete suspicious emails. If they’re unsure about the legitimacy of a request, encourage them to verify it through official channels.
- Don’t Share Personal Information: Advise your loved one to never share personal details such as their Social Security number, credit card information, or bank account numbers with anyone they don’t know and trust.
If you suspect that your loved one is being financially abused, it’s important to take immediate action. Report the abuse to adult protective services (APS), financial institutions, law enforcement, and seek legal guidance from an elder law attorney.
- Consult a Financial Advisor and Elder Law Attorney
If managing your loved one’s finances becomes overwhelming, consider seeking the advice of a financial advisor and elder law attorney. These professionals can help guide you through the process of managing assets, minimizing taxes, and protecting against financial abuse.
An elder law attorney can also assist with drafting important legal documents, such as wills, trusts, and powers of attorney, to ensure that your loved one’s finances are in order and their wishes are respected.
Conclusion
Managing and protecting your loved one’s finances is an important responsibility that can help safeguard their financial well-being and prevent fraud or abuse. By setting up legal protections, monitoring accounts, avoiding scams, and staying vigilant for signs of financial exploitation, you can help provide your loved one with the support they need while helping to maintain their financial security.
If you need assistance with managing your loved one’s finances or have concerns about financial exploitation, don’t hesitate to contact SAMUELS WOOD PLLC at (561) 864-3371. We are here to help with estate and incapacity planning, financial protection, and ensuring that your loved one’s rights are respected.
