Against this growing threat of scammers, you must be ready to safeguard your parents by becoming their trusted advocate. Too many criminals take advantage of our elders, preying on their age and limited technical abilities. Unfortunately, not all older folks have trusted family members or advocates to help them understand these types of situations. Working with a CERTIFIED FINANCIAL PLANNER™ professional is a great start to safeguarding your elderly parents and yourself from financial fraud.
Here are seven steps you can take to begin the process of advocating for your parents and safeguarding their financial future:
Talk About Money
It is important to start conversations with them now instead of later and explain that having someone younger help with financial decisions can help protect them from fraud. Be sure to ask about their spending, saving, and giving habits. Show that you care about their well-being, not just the numbers. Review their spending, and make sure no one has access to their bank account information.
Gather a Money Team
It can be uncomfortable to talk with your parents about finances, so adding other members of the family to the team is often helpful and can make discussions easier. If your parents are working with a CFP® professional, ask them to include you in the meetings. This will help you cultivate a relationship with their Money Team.
Schedule Regular Check-Ins
We recommend you help them establish online access with their bank so that you can monitor banking and credit activity regularly. Also, set up automatic drafts from their bank account to handle their monthly fixed bills. Many elders still like their bank checking accounts balanced and reconciled monthly. Sitting with a parent monthly and going over their account activity allow you time to ask about any expenses that look out of the ordinary. Also, keeping siblings up to date on a regular basis helps to create and maintain trust within the family unit.
Update General Power of Attorney Document
At times, you may find yourself in a situation where you need to talk with your parents’ financial services institutions. Therefore, you want to make sure your parents have an up-to-date financial power of attorney (POA) listing you and other trusted contacts. Most financial institutions like to have this document dated within five years of execution. Listing a successor (or two) provides a safeguard that someone will be able to act for your parent when the time comes for advocacy.
Current Healthcare/Medical Power of Attorney Document
A medical power of attorney (MPOA) is equally as important to your parents’ financial well-being. Being able to have direct communication with healthcare companies, providers and so on, makes navigating overall care and finances easier. These documents spell out the wishes of your parent in certain health events. They name the healthcare agent and guardian as well as your parents’ wishes on how and what treatments they would like in case they are not able to communicate at the time. Having these documents drafted prior to any health issues if possible and give a copy to all doctors as well as the hospital with which the doctors are affiliated ensure continuity.
Shred! Shred! Shred!
The Federal Trade Commission is another important site that helps consumers understand scams and ways to prevent them. On its website, you will find a list of documents that are best shredded rather than simply thrown away. Help your parent by going through old files and clean out outdated documents.
Monitor Credit Reports
Lastly, make sure to review your parents’ credit report at least annually. By reviewing and monitoring activity on their credit report, you help ensure that no one has access to their private identification and can open credit in their name.
If you or a loved one experience fraud, contact the AARP Fraud Watch Network, which equips you with reliable, up-to-date insights and offers a free Fraud Network Helpline. The network also advocates at the state, federal and local levels to enact policy changes that protect consumers and enforce laws.
This commentary was originally posted by Laura J. LaTourette, CFP® June 15, 2022
**Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.