As our population ages, stories about financial abuse of the elderly appear daily in our media. Preventing any abuse of persons at risk like the elderly should be a goal of each of us. Perhaps you are getting older yourself and are concerned about this problem. Perhaps your parents or grandparents are reaching ages where protection for them is important. However you are interested in protecting the elderly, keeping our older loved ones safe from financial abuse is crucial to their overall well being.
Here are several tips and ideas for preventing financial abuse of people at risk due to age or any infirmity.
1. Start by working with an experienced estate planning attorney or an attorney specializing in Elder Law. They will have experience in helping older clients and be aware of the many issues to be addressed. Initially, the first issue is if the client has appropriate capacity to make decisions and to create documents such as trusts; Wills; and Powers of Attorney necessary for their protection.
2. Reduce or eliminate excess cash on hand in the person's home. Generally, there is no reason for anyone to have large amounts of cash on hand and this can be an unnecessary risk for an older person.
3. Consider having the person in question use only a debit card and not have other or multiple credit cards on hand. Consider a reasonable daily limit for the card that would trigger notification to a trusted person if the limit is exceeded.
4. Use auto-bill pay arrangements for the various needs and services for the person at risk. Also consider having duplicate statements for all services and accounts sent to the older person's accountant or attorney so account activity can be monitored.
5. Avoid sole-authority Powers of Attorney with the sole authority in the hands of an individual. Have co-agents and consider having the agent or co-agent be a bank or trust company.
6. Avoid gifting provisions in the Power of Attorney, especially there is only one agent.
7. Consider a funded revocable trust for the older person's assets and accounts. Most assets other than retirement accounts and annuities can be placed in this type of trust. Have an institution such as a bank or trust company be either the co-trustee or the sole trustee of the trust.
8. Consolidate multiple accounts and eliminate stock certificates by holding ALL investments in a brokerage account or in the trust account. Having original certificates at home creates unnecessary risk to the person at risk.
Note that this is not an exhaustive or complete list and many of these tips may not apply to all persons. The best beginning tip is to work with a lawyer experienced with estate planning for older persons. Each person is different and special and deserves assistance that is tailored just to their needs.
The author wishes to express thanks to attorney Martin Shenkman for several of the ideas in this article.
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