Things You Need to Know About Handling Your Aging Loved One’s Finances

Things You Need to Know About Handling Your Aging Loved One’s Finances

Sometimes a loved one starts having trouble managing her money because of confusion, cognitive decline, Alzheimer’s disease, or some other form of dementia. When that happens, you might find yourself having to serve as her money manager. Here are some things you need to know about handling your aging loved one’s finances.

Changes to Make Now

Your loved one must be legally competent to takes steps, like adding a trusted friend or relative to a bank account or creating a legal power of attorney or executing a will. Once your aging loved one becomes incapacitated, she will not be able to hand the reins over to someone else.

At that point, the only option is to go to court and obtain a Guardianship or Conservatorship using an experienced estate planning attorney. These processes can take months or longer, and they often cost hundreds of dollars in legal fees for the lawyer who files and handles the Guardianship/Conservatorship and court costs.

People often challenge changes that a person makes when in the early stages of Alzheimer’s or after a certain age.

How to Avoid Elder Financial Abuse

Sadly, the vast majority of people who steal from older adults, are the people they trust the most. Family members, friends, clergy and financial professionals commit the lion’s share of elder financial abuse. To prevent this outcome for your loved one, you should:

  • Have one person in charge of your loved one’s finances. Speak with an experienced estate planning attorney and execute a Durable Power of Attorney to do this should you take ill.

When this person takes over, the person should prevent identity theft and fraud by canceling and shredding your relative’s debit cards and credit cards. The individual would be able to close any  accounts at PayPal etc.

Keep All Transactions Above Suspicion

Because incapacitated people are so vulnerable to theft and fraud, the people who manage your loved one’s money and other assets should take precautionary measures to make it clear they are acting in your relative’s best interests. Always write the reason for the payment on the memo line of the check. NEVER CO-MINGLE FUNDS.

Do not borrow from the account. Do NOT use your loved one’s assets for purchases that benefit anyone other than your relative. Do NOT use HER assets for your own benefit, like driving HER car to work.

Every state has different regulations, and this article covers the general law. You should talk to an experienced elder law attorney near you.

References:

AARP. “Managing a Loved One’s Money.” (accessed July 11, 2019) https://www.aarp.org/caregiving/financial-legal/info-2017/managing-someone-elses-money.html?intcmp=AE-CAR-LEG-EOA1