People become more trusting in old age. Between the natural cognitive decline of aging and issues like dementia, we also become more vulnerable to abuse and fraud. Learning how to protect your parents' assets is mostly about taking sensible preventive measures, and most of them are quite simple to do. Below you can learn a bit more about what kind of steps you might want to consider.
How Can I Protect my Elderly Parents Money?
There are both proactive and preventive measures for addressing these kinds of questions. For starters, it can be worth learning a few signs that might indicate someone is having difficulty with money management. Some of the more common signs to be aware of include:
- Difficulty calculating tips
- Missing cash or funds from accounts
- Trouble balancing checkbooks
- Unusual purchases
- Late/unpaid bills
Another thing to watch out for is a high number of calls from telemarketers; marketers who have been successful once are liable to try again. You can contact the US Government National Do Not Call Registry to have loved ones placed on the blocked list. Doing so won’t entirely prevent scammers from reaching out, but it can help reduce the problem.
Another simple step you can take towards figuring out how to protect elderly assets is ensuring loved ones review their free credit report every year. It’s an important opportunity to ensure no identity theft has occurred, and it’s a generally good tip for people of any age.
Can I Give Money Away to Avoid Care Costs?
As is often the case with legal issues, this is a more complicated question than it initially appears. Can you give money away to avoid care costs? Doing so can affect eligibility for Medicaid, as transferring assets within five years of entering the program can interfere with eligibility.
As of 2021, the most recent limitation of tax-free gift-giving is $15,000, but the Medicaid program will still consider the exchange a transfer and count it against you. However, you can transfer assets to a spouse, or from a senior who is permanently disabled, without affecting eligibility.
How Can I Protect my Elderly Parents Assets?
If you think your parents are at greater risk, you may also want to learn more about their estate, including their future financial goals. And in some cases, you may need to weigh the advantages and disadvantages of creating a joint bank account.
Fraud against the elderly is unfortunately quite common, and people are naturally hesitant to reveal having been the victim of fraud. Joint accounts can be one of the best ways for protecting parents' assets because they support personal autonomy, transparency, and are simple to set up.
In instances of more severe cognitive decline, protecting elderly parents' assets might be best achieved with a financial power of attorney (POA) document. Determining how to protect your home if you go into care can be partially addressed by a POA, but a better option might be establishing a trust. In either case, you’ll want to learn more about estate planning for seniors.
Protecting Elderly Parents Money
If you ask yourself “how can I protect my elderly parent's assets”, you’re already on the right track. Unfortunately, there’s often no way to guarantee your loved ones won’t encounter adversity. But if you look for common signs of problems and take basic steps, you can go a long way towards reducing their risk.