Posted On: Feb 02, 2016, Posted By: Velasco Law Group
As your parents age, their ability to effectively manage their finances may deteriorate. Bills may go unpaid, medical expenses may compound, or even worse, others may move in and try to scam your parents out of their hard earned assets.
Unfortunately, there’s often no easy way for adult children to step in and take control when things take a turn for the worse. Parents likely don’t recognize their deteriorating competency, or may be too prideful to ask for help. The best course of action is to watch for warning signs early on, and have a plan to take action before things spiral out of control.
Start the conversation early.
As with most problems, a preventative approach can save countless headaches down the road. If your parents are still in good health and of strong mind, open a dialogue about how they would like to be cared for. If they don’t already have an estate plan in place, start that conversation.
Convincing someone to relinquish control of their finances is never easy, regardless of their age or mental state, but there are steps you can take to make the transition easier when the time comes. Discuss setting up online banking and automated payments, so bills are less likely to go unpaid. Offer guidance balancing bank statements, so that you have a sense of the bigger financial picture, and can create a game plan for later.
Know what’s going on in their lives…
It may be an uncomfortable reality, but there are people out there that may see your parent’s wealth and deteriorating capacity as an opportunity. They may enter your parent’s lives disguised as caretakers, old acquaintances, or even a potential lover. Often times, these interlopers will try to weasel their way into the will, or worse, try to marry your parent and take everything. Get a sense of who is coming and going, and who may be trying to get a little too close. Just your presence alone may scare off a potential con-artist, who is likely looking for an easy, unguarded target.
Of course, it’s also very possible that everyone surrounding your parent does have good intentions, and getting to know them still has its advantages. By having a list of people who see mom or dad on a daily basis, you know who to contact if problems arise. It’s also handy to know their professional contacts, such as a doctor, financial advisor, or attorney, in case you need their help early.
In addition to friends and contacts, look for clues about their spending. Some seniors fall into a habit of increasingly reckless spending; ordering from QVC, buying lottery tickets, or signing up for extra credit cards. If you find evidence of this, and know that the spending is well beyond your parents means, you may need to intervene.
Have an action plan.
Know when it’s time to take action, and what your plan is. If your parent has been evasive about creating an estate plan or refused help with finances up until this point, begin consulting an estate planning attorney and discuss your options.
Legal action — such as a power of attorney — should be a last resort, but it may be your only recourse if all other avenues have been exhausted. A power of attorney is a form that authorizes you to make legal, financial, and medical decisions on behalf of your parent. If you can get them to recognize that they need help, you may be able to convince them to sign the power of attorney over to you. If they’re still resistant, then you may need to go to court with your elder care attorney. Your attorney will need to convince the court that your parent can no longer make sound financial decisions on their own, and control should be turned over to you.
Care for an aging parent can be difficult, especially when there is resistance on the other side. A strong support network can make all the difference, so communicate with other siblings and extended family as often as possible. Set up regular updates, and remind them how they can help. Talk early and talk often, and have a plan in place long before it’s needed.
For more information on estate planning or inheritance disputes, contact our office at 562-432-5541. Make an appointment with any of our offices, in Long Beach, Downey or Irvine.
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