I recently read a very disturbing story. The story was about a senior citizen who lived alone, his children were out of town and basically he had his money stolen by a caregiver. The caregiver was hired by the family to assist the gentleman with his needs including handling his finances. Even though they eventually prosecuted and convicted the caregiver, it was relatively meaningless because the end result was his money was gone. Unfortunately, these stories are becoming more and more common. People are living longer than they ever have before and the fact that families are spread out all over the country, along with the complexity of personal finance, has resulted in a wave of elder financial abuse. It is becoming so prevalent that finally, federal and state agencies are starting to awaken to the problem.
No one would want to end up like this gentleman did. He is now broke, totally dependent upon government assistance and as a result, his quality of life is not what he had hoped it would be. The lesson is twofold. First, as you and I get older we have a responsibility to ourselves to make sure we have a plan in place to handle our finances if we are unable to do so. In the case at hand, nothing was in place thus, leaving the caregiver an opportunity to take advantage of the situation. I believe you have to be pro-active and have a plan. The plan has to have some sort of checks and balance system to protect you. Particularly if you have a non-family member assist you with your finances, there needs to be some oversight. Unfortunately, in many family situations there also should be some sort of oversight. The reality of the situation is that sometimes even children will take advantage of their elder parents. That is why children are not necessarily the best people to handle senior’s finances.
The time to start thinking about these issues is not when the crisis develops, but should be done well ahead of time. This is a difficult issue and it is one we hope will never happen to to us; however, it’s important to be prepared. In addition, when you have time to explore and research the various options available to you, it will help you make the right decision for your situation. In the midst of a crisis, that is the worst time to try and make a decision.
It would be easy if you could say that once you turn a certain age that is when you need to start thinking about these issues. There is no magic age; rather, it depends upon your situation. However, suffice it to say someone in their mid or late 70s, no matter what their current health, should at least begin the process of exploring their options. In addition, if you have a loved one who is getting up in age, it is important to begin to explore this issue. I recognize these are difficult conversations to have and they’re not pleasant. However, what is also difficult and not pleasant is what happened to this gentleman, to be elderly, in need and have no resources.
One last note and that is if you are going to handle someone else’s finances it is important to have the right legal documents. For most situations, this will be a Durable power of Attorney. This document will give you the legal authority to handle someone’s finances and at the same time provide you some protection from bogus lawsuits.