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A Guide To Protecting Elderly Parents’ Assets

As your parents age, they become more susceptible to losing the assets they worked so hard for all these years. Assets like their home, bank accounts, and investments are at risk to elder fraud and insurance agencies. To safeguard these assets, you should take the proper precautions found in this guide.  

Dementia and Elderly Finances

Dementia affects seniors’ memory, thinking, and social abilities, making them more susceptible to elder fraud. The total number of people with some form of Dementia is projected to reach 82 million by 2030. Alzheimer’s, the most common form of Dementia, affects 1 in 9 people aged 65 and older. 

If your parents are showing early signs of Dementia, you should talk to them about protecting their assets as soon as possible. Dementia is a progressively worsening disease, meaning the longer you wait, the higher chance they have of losing their investments. 

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If you are unsure if your parents have Dementia, look for early signs such as:

  • Troubles with balancing a checkbook, calculating change, or organizing financial documents
  • Missed calls from the bank
  • Money missing from their bank account
  • Unusual purchases
  • Late or unpaid bills

Due to the cognitive impairment brought on by Dementia, elders with Dementia are more likely to be taken advantage of by criminals. According to Bloomberg, elder financial abuse is rising, with around 1 million elderly Americans losing over $500 million in the U.S. last year. Common senior scams include:

  • Outright theft
  • Threatening phone calls
  • Fraud schemes
  • Unauthorized transfers of assets
  • Lottery scams
  • Electronic phishing
  • Mortgage loan scams
  • High fee investments
  • Insurance scams
  • Internet dating scams

Scammers often take advantage of seniors with memory loss over the phone, email, or even in-person. It is not uncommon for seniors to give their credit card information or social security number to someone they don’t know. To protect your loved ones, be on the lookout for:

  • Strange signatures on checks or legal documents
  • Unexplained money transfers
  • Sudden changes in your parents’ will
  • Changes to mortgages or loans
  • Missing jewelry or cash
  • New lines of credit
  • High numbers of telemarketers
  • Repeated calls from unknown numbers
  • Written threats of extortion
  • Unusual requests for charitable donations

If you notice any of these, ask your parents about them first. If you think they have been scammed, contact your local FBI field office or submit a tip online. Additionally, you can add your parents’ phone numbers to the National Do Not Call Registry, which prevents scam calls.

Can Medicaid Really Take Your Elderly Parents’ Assets?

The average cost of senior living is $70,000 to $170,000 per year, which is more than most people’s income allows. Most seniors rely on Medicaid to help pay for this care. However, Medicaid is a means-based program, which translates to applicants being required to have limited assets and low income to qualify. 

Seniors often wish to preserve their assets and have the intention of passing them on to their family members. Medicaid prevents this from happening due to the strict requirements they enforce. Before offering coverage, they expect seniors to sell all assets and deplete any savings. Once your parents have nothing left to pass on to their heirs, Medicaid will help pay for senior living. 

Furthermore, when your parents pass away, the government attempts to recover the benefits it had paid out for senior care in a process called “estate recovery.” You can minimize the effect of Medicaid on your parents’ inheritance and prevent elder fraud by following the tips and advice below. 

Talking To Your Parents

First, you should talk to your parents about safeguarding their finances, especially if they have early-stage Dementia. Conversations about their financials can be emotional; to prevent any conflict:

  • Talk as soon as possible – The older your parents get, the more likely they are to get scammed. Talking about memory loss and money management will be easier in the earlier stages of Dementia. 
  • State your intentions – Emphasize that you want what they want and are there to help them. Do not push your biases on them and help them make their own decisions. Explain your concerns and common financial pitfalls for people with memory loss. 
  • Give them time – It is natural for seniors to become emotional and defensive as they struggle to manage their finances. Your parents may not accept that they are having difficulties. It is important to be patient and to give them time and space when necessary. 
  • Include a third party – If they are taking a while to decide what they want to do with their assets, it might be worth including a third party. A professional elder law attorney or financial advisor can help point you and your parents in the right direction to safeguarding their finances. 

How To Protect Your Elderly Parents’ Assets

After you talk with them, consider the following tips to safeguard your loved ones’ assets. This will protect them against fraud, greedy insurance programs, and more. 

  • Gather all of their personal information – Ask your parents where they store their personal information and financial documents. Make a record of where it is all kept and move it to a safer location if necessary. 
  • Access their financial and investment accounts – Gain access to all of their financial and investment accounts, including credit cards, mortgages, and standard bank accounts. Check their bank statements each month for strange charges that might be fraudulent. 
  • Locate existing POAs or living trusts – Determine if your parents have established a Power of Attorney or living trust of any kind. If they have, locate those documents and keep them in a safe place. 
  • Decide on hiring professionals – It might be worth hiring an attorney, financial planner, or adviser to assist you with your parents’ finances. 
  • Consider becoming your parents’ guardian – If your parents have early signs of Dementia, it might be worth becoming their guardian now. This will make it easier to make financial decisions for them in the future.  
  • Agree on a daily spending limit – If your parents use a debit or credit card, it might be a good idea to set a daily spending limit. This will prevent scammers from taking large amounts of money from your parents. 
  • Learn more about their estate – Ask your parents about their estate and their goals for the future. It is important not to be biased and to let them choose what they want to happen with their assets. This will help ensure there aren’t unaccounted for assets that might be vulnerable. 
  • Designate a durable power of attorney (POA) – A durable POA can act on a person’s behalf financially and legally when they are no longer able to do so. This can help people with Dementia avoid court actions that could take their assets. 
  • Establish a living trust – Talk with your parents about establishing a living trust and designating a trustee. This will provide guidance on managing your parents’ estate when they can no longer manage their affairs. 
  • Block scammers – Add your parents to the National Do Not Call Registry to block scam calls and telemarketers. 

The Bottom Line

Dementia is a progressively worsening disease that affects the cognitive performance of people. If your parents show early signs of Dementia, you should quickly take the proper precautions to protect their assets. Elder fraud is a big problem right now, and scammers or finding new ways to abuse the elderly every day. The tips in this guide will help you protect your parents’ assets. 

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