Are the seniors in your life financially safe?
Welcome back!
Too often in the news, we see headlines about financial crimes targeting seniors. With this in mind, we wanted to use this episode of Coffee & Cash to help heighten your awareness to how to help those who may become a target. Good planning and communication are key to ensuring a loved one does not become a victim of financial opportunists.
Let us start with a few questions to help you self-evaluate:
Has your older relative or friend planned for a decline in financial abilities?
Are you prepared to detect signs of a financial decline?
Do you know what to do if you do notice problems with finances?
Many people, even the ones who are caring and well-informed, will often answer “no” to these questions.
Today, we’re going to cover the importance of awareness with regards to financial decline, the warning signs of financial decline, and proactive planning for future needs. A decline in the ability to manage finances are very common among older adults. Managing money is a primary way we each maintain control over our independence. For seniors this lends itself to a breakdown in communication over their finances due to the fear that they are relinquishing control.
There are a number of reasons why financial decision-making skills may decline, but older adults are more likely to struggle with managing money and are more susceptible to poor investment decisions or inappropriate recommendations they may be given.
Here are some warning signs of decline to look out for:
Taking longer to complete everyday financial tasks
Reduced attention to details in financial documents
Decline in everyday math skills
Decreased understanding of financial concepts
Difficulty identifying risks in a financial opportunity
Here are some ways to help protect an older adult from future financial decline:
Encourage seniors to simplify their financial lives. Ideally, as you plan for retirement, can be the most effective time to begin the process of simplification or the various financial vehicles you may have acquired in your working years. This is a time when you are likely to be at your sharpest and able to make sound financial decisions. Such planning helps consider the future changes you will experience and allow for ensuring a basic understanding of your changing financial needs as you age and how your finances will be impacted.
Address your awareness and understanding of common legal tools such as a power of attorney, wills and trust vehicles. Have open conversation about ideas on healthcare protections, charitable plans and intentions for assets relative to beneficiaries.
Preauthorize lawyers and financial planners to contact a trusted relative or friend if the professional suspects diminished financial abilities. This can make it easier for professionals to get a senior’s care circle involved sooner rather than waiting for a frank financial disaster to happen. Financial professionals are bound by the Senior Safe Act, to use good judgement and such shared information to aid in the protection of assets for seniors who they may suspect are being financially abused.
Encourage seniors to allow a trusted person to monitor their accounts with them to ensure things remain consistent. This could be family member , trusted friend or a professional such as a fiduciary. Keep in mind, that a “trusted person” is NOT a power of attorney and merely acts as a designated person that can help explain concepts, ask critical questions and monitor activities of the other advisors or individuals involved with the senior or have influence.
An ounce of prevention is worth a pound of cure, as the saying goes.
If you feel like you need help personally to address this topic or maybe you are currently observing a loved one in your family that needs help financially, please feel free to contact us. We are happy to review more information on this topic and make introductions to other professionals that might be able to share more information in the areas of legal and taxes.
Thank you for joining us and don’t forget to like us and subscribe to our videos. We will see you next time for another episode of Coffee & Cash!