Assisting someone with his or her finances sounds simple, right? Your mom, a neighbor or the person for whom you provide home health care may ask you to write a few checks out of her checkbook because it’s difficult for her to see. She may ask you to pick up a few groceries and gives you some cash. You’d think that folks would understand your good intentions and maybe even thank you.
But Bankrate’s article, “Be cautious before helping seniors with their finances,” warns that, unfortunately, it may turn out differently. Unless you’re an only child helping your parent, when you start writing checks, suspicions may arise, with or without justification.
Elder law attorneys hear of financial elder abuse suspicions and actual abuse on a regular basis. Therefore, just because a senior asks for your help, doesn't mean you should help. This is because things can get complicated.
Once you get involved, you may see that there are many moving parts. There could be an already-troubled senior who’s paying some bills twice and some not at all, or donating money to questionable organizations. Their finances may be in disrepair. Remember, if you don't have the time and aren’t ready to take on a complex process with legal implications, just say no.
Power of Attorney. A power of attorney gives the holder authority to execute certain transactions. While you don't need an estate planning attorney to create up a power of attorney (POA), you're taking a chance if you choose the do-it-yourself route. If you need to obtain a guardianship (or conservatorship) for the senior, you’ll need an elder law attorney. A guardianship gives you the authority to take control of the senior’s finances. There will be a court hearing, and you’ll have to present medical records and be represented by an attorney.
Minimize Risks. It is important to try to minimize the risks for the senior and maximize financial accountability. Monthly bills like utilities can be directly debited from the senior's bank account. You should never sign the senior’s name on checks or credit card purchases. They may insist that it is okay, but they would be wrong.
Record-keeping. Regardless of the amount of authority you have been given to help a senior or control their finances, it's crucial that you keep meticulous records to protect yourself. POAs should hang on to receipts for everything and never combine their money with the senior's money. You should never borrow money from them, and don’t fall into the trap of believing you’re entitled to money because their family is never involved. That’s financial exploitation, and it is a criminal act.
Communication. If a senior has adult children or close family members, you and the senior should maintain a strong line of communication. One suggestion is monthly reports to at least one other person. It is important to document everything and to make certain that all family members are informed.
Reference: Bankrate (February 15, 2017) “Be cautious before helping seniors with their finances”