MONEY: Checking in on Mom and Dad’s checkbookAs parents age, children must decide when to take over financial decisions
We struggle enough with determining whether it’s time to take the car keys from our elderly parents. Another tough decision that many families will have to grapple with is whether it’s time to take the checkbook from Mom and Dad because of their cognitive decline.
By: Pamela Yip, Dallas Morning News
DALLAS — We struggle enough with determining whether it’s time to take the car keys from our elderly parents.
Another tough decision that many families will have to grapple with is whether it’s time to take the checkbook from Mom and Dad because of their cognitive decline.
While it’s important to respect your parents and their dignity and independence, you also must be prepared to save them from themselves if they’re engaging in financially damaging behavior.
But approaching this situation can be difficult.
“The issue of safe finances, as compared with safe driving, needs to be handled just as carefully, with appropriate respect,” said Sally Hurme, senior project manager for health education and outreach at AARP.
“Taking away the keys to somebody’s car is a dramatic step that can seriously hinder their mobility and independence,” she said. “Taking whatever steps to monitor or control in some way a parent’s financial freedom is an equally or even more serious infringement on their independence and autonomy, self-esteem.”
The ability to manage personal finances is part of a person’s “executive function.”
It’s the cognitive process that regulates a person’s ability to organize thoughts and activities, prioritize tasks, manage time efficiently and make decisions.
“Executive function is that ability to make change, balance your checkbook, make reasonable decisions about the value of an item in the marketplace — those general skills that adults acquire over time about how to manage their money and not be taken advantage of,” Hurme said. “A decline in executive function certainly can result in increased vulnerability to exploitation.”
Experts say to watch for these signs:
Unpaid bills: “The utilities have been shut off, a tax lien has been imposed because property taxes have not been paid,” Hurme said. “There might be piles of unpaid bills lying around the house.”
Beverly Flach, a case manager at the Senior Source guardianship program in Dallas, said she entered her elderly mother’s apartment one day and found something unusual.
“She had all of this paperwork piled on chairs, floors, on the table,” Flach said. “She was there running her fingers through her hair and was very upset.”
Flach said when she asked what was wrong, her mother said, “I can’t figure out what I owe and what I’ve paid.”
“She wasn’t accurately able to read the bill that says, ‘This is how much I owe,’ “ Flach said. “Some bills she was overpaying, and she was behind in some. I found out she was about to be dropped by her health insurance because she wasn’t paying her premium.”
She and her mother worked together to straighten out the finances and her mother “asked me to take her checkbook and said, ‘You take care of the bills,’ “ Flach said.
Her job was made easier because her mother, who died in 2006, gave her financial and medical powers of attorney “years before she started to decline,” Flach said.
A power of attorney is a legal document your parents sign to give you the authority to handle their financial or medical matters if they become incapacitated.
When her mother had trouble with her telephone bill, Flach had to prove she had power of attorney for her mom.
“I had to show them that I had the right to talk to the phone company about her bill,” Flach said. “People she owed money to wouldn’t talk to me without the power of attorney.”
Frequent calls from strangers: “You want to spend time with them and see how much the phone is ringing,” said Suzanne Cobb, director of the guardianship and money management program at the Senior Source. “If the telephone is ringing frequently, it could be a sign that scammers are calling.”
A sudden new ‘friend’: You want to watch to see if suddenly “there’s a new person in their life who seems to have extraordinary interest in their finances,” Hurme said.
“The twin sister of this is this newfound friend is in some way cutting them off from their ordinary sources of social support, putting them in isolation, putting themselves in as the significant influencer, cutting them off from the other social influencers so they become the sole influencer.”
Unusual spending habits: “If your parents have always been financially responsible and spent their money wisely, and all of a sudden a new car shows up in the driveway, if there’s a noticeable difference in how they are spending their money, it could be a sign that you need to investigate further,” Cobb said.
If you decide it’s time to step in, Cobb said you may want to try some innocent subterfuge.
“One way to approach it is, ‘There is so much identity theft these days that it could help to have a second set of eyes looking at the activity in your checking account just to be sure nobody is accessing your checking account,’” she said.
But in more serious cases, “where someone is really mishandling their money and you feel that it’s because of changes in the brain, you need to think about guardianship,” Cobb said.
A guardianship is a legal arrangement where one person is charged by a court with managing the affairs of another person who, because of age, understanding or self-control, is incapable of administering his own affairs.
A guardianship should be a last resort because of the expense, the time it takes to obtain one and the process that “eats away at the available finances to be spent on caregiving,” said Brian Fant, an elder law attorney in Dallas.
“Guardianship can be easily avoided with the right documentation in place,” he said. Particularly important is the financial power of attorney document.
A financial power of attorney is critical before an elderly person starts experiencing cognitive decline because “they then become so susceptible to financial exploitation, especially from caregivers and family members,” Fant said.
Protecting seniors’ finances has become such a serious issue that regulators and adult protective services leaders have enlisted the help of doctors to recognize financial vulnerability and exploitation in their older patients.
They’ve produced a pocket guide for professionals who care for the elderly that tells how to spot signs of elder financial exploitation and abuse.
“Many aspects of normal aging and disease can contribute to older adults’ vulnerability to elderly investment fraud and other financial abuse,” said Robert Roush, a gerontologist at the Huffington Center on Aging at Baylor College of Medicine, who helped produce the pocket guide.
“This is no commentary on seniors and their judgment; it is a simple medical fact of life.”