Is it time to take over your loved one's finances?
A lot has changed in the financial world over the last decade or so. Young people today don’t remember a time when they could write a check and expect the check to not clear the bank for days but I remember a time when people counted on that particular fact. Something like that static online information (an anomaly today) or the time it used to take to clear a check is “old school” but for some people getting used to the new ways can present challenges in managing money or avoiding financial abuse.
Finances are a big deal. Everyone at every age recognizes the importance of having “your own money” from the kid with an allowance to the teenager with his first job to the senior living on a fixed income. Part of the lure of that money is the independence it offers. Losing control of their money is losing control of their independence and whether or not it’s real, losing their independence means losing control over everything from where you live to decisions on how you invest your money.
While it can be just that keeping up with new technologies is confusing, the fact is that financial issues are often one of the first indications that something is wrong cognitively. A parent or spouse seems to be doing okay and then the family discovers that bills aren’t being paid or money is being paid out to an unknown person or organization. Sometimes, it’s possible to provide a little bit of support and the individual is able to continue managing their own finances. Other times though, someone needs to step in and take over. But what if their response is to consider you overstepping your bounds?
Talk about it: If you begin to see difficulties with a loved one remembering to pay bills or making large unnecessary purchases, it’s time to have a family meeting. Honestly, it’s probably past time to have a family meeting but now you can put it off no longer. The optimum time to talk about and implement a plan isn’t once your loved one has dementia: it’s while they are still healthy and able to make decisions. The financial and legal industries face their own ethical dilemmas with how to handle poor decision-making. Talking early and talking often can help you to get a handle on where financial documents are kept, how to access them and what expenses and income to expect.
Seek professional help: Taking over another adult’s financial, legal and medical decisions either piecemeal or all at one time requires taking care of a myriad of tiny (and large details). Finding help from experts will make sure that all the proper processes have been put into place so that future decisions won’t come back to bite you. A report from the Alzheimer’s Society in the United Kingdom found that many caregivers reported emotional and psychological barriers and felt unsupported and confused when trying to take over someone’s finances. They felt that many banks and other services providers created obstacles.
Be on the lookout for financial abuse: Predictable behavior patterns, disabilities and loneliness are some of the things that create opportunities for unscrupulous individuals as are having loved ones with substance abuse, entitlement, or negative feelings according to the National Committee for the Prevention of Elder Abuse. For older individuals financial abuse can result in the loss of independence, homes, life savings, health, dignity and security.
If you need more suggestions on how to prepare for your own retirement or how to help a loved one prepare for theirs, consider attending a free seminar on LifePlanning.