As your parents age, there may be times that you question if they are still competent, because you wonder about some decision, such as money use or decisions about friends. Bringing up that question can be a difficult challenge, as Forbes discusses in the article in “Aging Parents at The In-Between Stage: Partially Competent and Partially Not.”
In this example, the aging parent presents well to the outside world, socializes well and seems to have all his faculties. The problem is, the children who know him see changes and worry about what might happen in the near future. Their father had always handled his own finances, and now he’s giving money away to anyone who asks for it. He is going through his accounts at a surprising rate, unlike his lifetime behavior of being an extremely careful money manager.
The first step for this family: a meeting with all the adult children and the estate attorney. They start with a review of the legal documents that had been prepared previously by the attorney. A Durable Power of Attorney had been put in place, when the oldest child had been appointed as his agent, with unrestricted powers. She had the legal authority to take over the management of her father’s accounts.
By using the Durable Power of Attorney, she was able to gain online access to all her father’s accounts to see what was actually going on. It was worse than the family expected. He had given money away to charities and to strangers. Armed with this information, she had to speak with her father. He bristled, but she persisted, knowing that she had the legal right to do this and the support of her siblings.
She suggested that she visit him to help out. It took several weeks of suggesting it, but at last he relented. On his desk, she found collection notices and a cancellation notice from his car insurance company for failure to make payments. By presenting the prospect of not being able to drive because of a lack of insurance, she got his attention to the seriousness of the matter.
Next, his assets were moved out of accounts where he had access. He continued to give away his money, but she controlled how much damage he could do.
This family was able to protect their father from a free-fall into poverty and dependency, because proper estate planning had been done well in advance.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances.
Reference: Forbes (Dec. 3, 2018) “Aging Parents at The In-Between Stage: Partially Competent and Partially Not”