MISMANGING MONEY MAY MEAN IT IS TIME TO TAKE THE CREDIT CARD AWAY FROM MOM

Has money gone missing from your senior loved one’s account? Have Mom or Dad been overly generous with gifts or given money to a total stranger? Did Christmas come early for a scammer or is your parent binging on things they will never be able to use?

There are no guarantees that Mom or Dad’s good financial judgement will follow them till the end of their days. You take the car keys away when driving becomes hazardous to them and to others on the road. The same applies to credit cards when there is trouble handling money, especially when memory loss or dementia begins to creep into their lives.

Nobody wants a financially incompetent parent spending their savings down to next to nothing only to be left in poverty. An adult child with a watchful eye can prevent some fraud and crazy spending. But more may be needed depending on the severity of the circumstances. If you have the power of attorney or are a trustee you can move money out of reach – either from your aged loved one, a scheming sibling that has been stealing from them, or a fraudster or scammer. Keep detailed records of every financial move you make and every dollar you spend on a parent’s behalf or from their accounts. That way, if your parent, a sibling or anyone else ever questions your motives, you can prove that you always have acted in the parent’s best interests.

If you have the right legal documents you can limit what a cognitively impaired individual can do with their funds. The goal is to safeguard your loved one’s financial well-being without compromising their independence. Consider another option such as setting up a pre-paid debit card with limited access if your loved one is losing money to scams, predatory telemarketers, or unwanted charges. It allows you to block online purchases to specific merchants, donations to sham charities, stop international charges and disable wire transfers, yet allows for expenditures on things like medications and meals. It can even limit ATM withdrawals.

Your parent may become outraged over your taking control of their finances, but gently explain that bills need to get paid and their well-being is at stake. Calmly reason with your loved one that you will be allowing them to safely and independently purchase what they need, but protecting their future by protecting their assets. Remember that initially they may resist even when help clearly is needed because they fear losing control of their lives as well as their finances. Cognitive decline can trigger paranoia, so they might fear you and your siblings may be after their money! It may work better if, instead of taking over all at once, you transition slowly into a position of control by assisting with bill pay, bank reconciliations, tax forms, investment statements, etc. You could get an inside look at the elements of your parents’ financial situation which might be helpful in making a decision about how best to proceed.

Look for these red flags:

• Bills for services that your parent does not seem to have received or required.
• Bills that seem much steeper than they should be or that the parent cannot explain.
• Bills that have been paid repeatedly. Disreputable service providers sometimes bill older customers multiple times to see if those customers will forget that they already paid.
• Donations to charity that do not match your parent’s priorities or financial means. People experiencing cognitive decline sometimes give money to every nonprofit that approaches them.
• Excessive trading in brokerage accounts and/or inappropriately risky investments. Disreputable brokers sometimes “churn” older clients’ assets, buying and selling investments with great frequency to generate numerous commissions.

A financially reckless parent is still a parent that you love, but their financial recklessness can be a big burden to carry for the entire family. Try getting your siblings on board by pointing out they will all have to chip in to pick up the broken financial pieces if parents don’t stick to a budget, continue to make reckless purchases, or succumb to scammers. Communicate openly with your parents as best as you can about unspoken assumptions that you or your siblings can support Mom and Dad if they go broke.

Many children face intense guilt if their parents are struggling financially. There is much you can do by helping them with budgeting, running their errands, and doing their shopping along with them and keeping a watchful eye. If problematic bills arrive in your parent’s mail regularly, consider having their mail forwarded to your address. Taking over someone else’s finances, whether by power of attorney or guardianship, is no small step. It creates legal obligations on you as a fiduciary, so be sure to speak with your family attorney.

If your loved one is struggling with memory loss or dementia, Visiting Angels is more than happy to assist with purchases for grocery shopping, general errands like dry cleaning, meals, salon services, medications, etc., by using pre-paid debit cards. Our caregivers and companions have all passed federal criminal background checks and have years of experience caring for seniors and the elderly in the community. They know to stick to the list of what is needed, steer away from over-priced or unnecessary items, and keep receipts of everything purchased for the family’s peace of mind.

TILL NEXT TIME!

Irv Seldin, JD

President and CEO, Visiting Angels of the Palm Beaches

*Article not intended as legal or financial advice