When your parents and loved ones start to age, it’s hard to accept that they may need your help more than you need theirs.
And because it’s hard to accept, it can be even harder to recognize when they need that help.
If you don’t spend as much time as you’d like with your loved one, it’s difficult to know the extent of the problem. Mom mixed up Sally and Suzanne’s names at dinner. Innocent mistake, or chronic confusion?
Even if you do see her often, it’s hard to be sure if Mom’s forgetfulness is a normal part of aging, or if it’s something more.
Warning signs to watch for
If you’re starting to notice even small changes, there may be cause for concern. Cognitive decline is tricky to diagnose. Some common symptoms may have other explanations (like medical issues, prescription drug side effects, vitamin or mineral deficiency, etc.)
But if you’ve noticed any of these signs, it could be time to step in:
- Changes in personality
- Short-term memory loss
- Sudden expensive purchases
- Out-of-character gambling
- Missed bill payments
- Losing track of dates
- Evidence of poor judgement
Your aging loved one may be falling into the “grey zone”—the challenging in-between place where someone might slip into incapacity in some of their decision-making… but not everywhere. In many aspects of their lives, they may remain completely functional.
How the “grey zone” affects finances
As people start to age, money is one of the first areas that can slip.
Not only can they forget to pay bills, but they can also make poor financial decisions.
Research now shows that the judgment needed for good financial decisions is the first to be affected in early stages of cognitive decline. Dad might seem to manage fine in his most daily activities — and there might be billed from 6 months ago piling up on his desk. Or he may miscalculate his checkbook and overdraw his account. Or he might forget about that $300 cash withdrawal he made and accuse the housecleaner of stealing the money from his bank account.
Finally, Dad may become vulnerable to falling for financial scams. And there is no shortage of scams targeting seniors!
Three things to do right now
Start talking: If you have any concerns about your loved one’s ability to manage money, it’s time to start a conversation.
The subject of money can be emotionally-charged. Especially with an older generation that was taught to be very private about money!
Start with the message that you only want to help. Letting them know that you don’t want to control them or take advantage of them can set the stage for a positive talk.
You might also consider having the conversation with a neutral 3rd-party present, like a financial advisor or a mediator. This can make the talk more focused on practical solutions, and less on emotions.
Know your options: A common route to helping manage an aging person’s money is to set up a Power of Attorney. This document gives you the legal authority to manage your loved one’s finances.
Another option is to become the trustee of their living trust. A living trust is a legal document that outlines how to manage your loved one’s assets. Once you become an appointed trustee, you have the power to manage the trust.
Remember that both of those options must be put in place before someone is incapacitated. If there is no POA or trust in place and the person loses capacity, your next option is to establish a guardianship. This is an option of last resort because it requires you to go to court to have the person declared incompetent based on expert findings. This process takes time and money, especially if family members disagree about the need for guardianship (or who should be appointed as the guardian).
Talk to a professional: Determining the right course of action for your family — and putting it into place — is not a DIY project. Talk to an estate lawyer. There are specialty elder law professionals who can help you navigate the options. It’s well-worth the professional fees to get the peace of mind that everything is taken care of correctly.
If you are concerned about your loved one possibility losing his or her ability to make financial decisions, don’t wait. Reach out to us at MDL Financial. We can help you define your next steps to preserve assets — and take care of your family.