Adult children of aging Americans are finding themselves caught in a delicate situation of whether they should look into the finances and investments of their parents, according to U.S. News & World Report in “How to Help Aging Parents Manage Portfolios.”
It is not easy to talk with parents about their finances and their vulnerability to scam artists. Today’s thieves are very savvy. They use Facebook and other forms of social media to learn about family members travelling outside of the country, then they prey upon the elderly parents.
Older adults, who are lower in numerical skills, tend to rely on their emotional response in making financial decisions. Loneliness and depression, common in aging seniors, also increase the risk of becoming a victim of a scammer - that is especially so in the case of someone who has recently become a widow or widower.
It is often hard for seniors to discuss finances with their children unless they have done so over the course of their children’s lives.
The biggest problem for many elderly people is the loss of their ability to drive, and that is followed by the inability to handle one’s own finances. And this problem is only growing as investors live longer. It only takes a few mistakes for an impact to hit the portfolios and often there is no recourse.
The first step for adult children is to be aware of any signs of mental decline. Just be careful not to jump every time someone cannot find the right word or remember someone’s name. Keep an eye on their behavior - such as a formerly neat person who is now leaving bank statements lying around open on their desk, past-due notices arriving or an extreme amount of mail from questionable charities (versus large nationally-known organizations). This mean it is likely they are having a problem handling day-to-day finances.
But do not confront the issue in a challenging manner. Have a pleasant conversation, possibly starting with a talk about your own finances and how you speak with your own children, or plan to, to get them moving into the topic. Once they are comfortable talking about money, start discussing other important issues, like whether they have a Will, Advance Directive or Power of Attorney.
An experienced estate planning attorney can advise families how to deal with this delicate situation.
Reference: U.S. News & World Report (Oct. 22, 2018) “How to Help Aging Parents Manage Portfolios”