The transition of responsibility for money management is rarely a smooth transition. During the process you will likely discover your parent has a very different way of managing finances and records than you do. When possible, work together through the transition. Review his or her checkbook, bank statements and financial documents together.
Many of us do not have the luxury of any real "transition" period. The finances suddenly fall into our laps one day, and we must make the most of it. As we delve through we may find many unexpected surprises (and likely most of them will not be of the pleasant sort).
Keep in mind that elderly are often prey for scam artists, insurance companies and unethical businesses. Be sure to watch for the warning signs of inappropriate payments, banking errors and losses. Predators, errors, omissions and simple mistakes could cost your parent (and you) dearly if they aren't addressed in a timely manner.
Warning Signs to Watch For:
- Lost Checkbooks. Go through all the checks and make sure they're accounted for. If they aren't, see your banking representative to cancel the missing checks or create a new banking account number.
- Large Donations. Many elderly persons with mental digression bite when a fundraiser drops the lure. Ensure your parent is either able to handle such situations or unable to access their funds without consent for large dollar amounts.
- Home Shopping Networks. Trust me, they can be tragic. When stuck in front of the TV for hours on end, it is easy for a senior (or anyone really) to be sucked into the need to purchase the latest fashions, gadgets and gizmos pawned across the airways. If your parent has a habit, make sure they cannot access forms of payments for those impulsive buys.
- Medical Bills. Insurance companies are infamous for their "mistakes" in handling deductible payments, co-insurance and other medical billings. Watch for inappropriate payments and multiple billings from providers.
- The Unknown Benefactor. Consistent and/or unusual payments to a person you are not familiar with is a possible sign that your parent is being exploited financially.
- Past Due Notices. Bills are likely to get missed in the transition process. If your parent has lost some of his or her mental capacity, it is highly likely many bills have simply "disappeared." Look back several months to review all bills and ensure all are up to date.
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