These days, we are becoming more and more familiar with the term, “Sandwich Generation:” those who are faced with the dual prospect of providing ongoing financial support for struggling adult children and simultaneously watching over aging parents who are becoming dependent. For younger Baby Boomers and older Gen Xers, the need to safeguard aging parents’ finances is becoming particularly acute. There are several useful steps that can be taken to help shield older persons from both their own failing cognitive abilities and from financial abuse by others.
One of the most important steps is also one of the most basic: Stay in touch. Elders who are in frequent communication with their children or other younger caregivers are much less likely to be victimized, financially or otherwise. Consistent contact by family members, and the ongoing awareness of elders’ situation, resources, and concerns that results, will do almost as much as any other single step to assure that aging parents continue to live securely and with dignity.
Powers of attorney that cover both healthcare and financial decisions can also insure that retirees have a trusted person who is able to speak for them, should they become incapacitated. Often, it is advisable to have a separate document for healthcare and finances, since the person who can be most trusted to make potentially life-or-death medical decisions may not also possess the acumen to manage important financial decisions.
Another helpful move to consider is consolidation of elders’ checking accounts at a single bank and any investment or brokerage accounts at a single firm. Many older people are in the habit of maintaining different accounts for different uses, but in later years, memories often become cloudy, leading to forgotten accounts and other hazards. Making sure that everything is centralized will greatly simplify the task of those who are assisting aging parents with their finances. This can also be a good time to cut up all but one or two credit cards: Use one for automatic bill payments and another for day-to-day purchases. Keeping it simple is the key.
The American Association of Retired Persons (AARP) maintains an active fraud prevention network; information is available at AARP.org. Similarly, the federal government’s program, accessible at StopFraud.gov, has a separate link for “Elder Fraud.” Finally, the IRS (IRS.gov) maintains a list of the “Dirty Dozen” currently active tax-related scams, many of which target vulnerable older taxpayers.
Returning to the step that opened our discussion, for all of the above ideas, the principal key is good communication. Staying in close touch with aging parents or other elderly persons permits talking about possible scams, warnings, and other helpful information. This is also pivotal for helping older investors, the majority of whom value their independence very deeply, to accept the difficult fact that it is time to relinquish some or all of the day-to-day decisions about their finances. According to most experts, older Americans are unlikely to recognize the degradation in their capabilities, and caring, consistent communication from a trusted person provides the best opening for the conversations that can help them allow others to provide the oversight that they need.