What Price, Denial?

Sometimes I am astounded by the situations we encounter as consultants being asked for advice. Elders losing mental capacity and being at risk for financial abuse are recurring themes.

Take this real situation, in a question I recently answered in response to an anonymous person. The location is unknown, but it could be anywhere. It seems that Dad was declared incompetent three years ago. He attends a senior center in his town several days a week. A woman there has been giving him lots of attention and the family is worried. She may not be in the U.S. legally. Her interest seems to come from ulterior motives. Dad has money. He has been financially abused before, and the family is aware of the problem.

The family is worried about what to do because the woman is now persuading Dad to do things with her outside the senior center. They all think she’s after his finances. Here’s the astonishing part: the Dad, incompetent and financially abused in the past more than once, still has access to his checking account and his money market accounts! What are they thinking?

My advice was the obvious: immediately cut off his access to the checking account and money market account. They would need to do this via a durable power of attorney. I am hoping this family had him sign one before he became incompetent. If not, it may be too late. You can’t legally sign documents when you’re incompetent. If they blew it, and never got this done, they have only one choice to protect Dad from a financial predator, and that is guardianship, also called conservatorship. It requires going to court. It’s expensive. It’s a lot of trouble. In Dad’s case, it might be the only thing left that could keep him from financial disaster.

I had a lot of trouble understanding how a family with a Dad in that condition could let him keep using his money freely, knowing he couldn’t make competent decisions. Maybe he has so much money no one cares, but that would be very unusual. It is financial abuse waiting to happen, and it ‘s not the first time.

Is the family in denial about what financial incompetence means? Are they afraid of Dad? Are they all such wimps that they can’t simply step up and take responsibility? I’m not sure, but this is not the first time I have been asked about this, and in a similar situation.

Financial abuse is estimated to cost our elders $2.6 billion per year. We hope that is enough to get everyone’s attention. Here’s what adult children need to know to keep this from happening to you and your loved ones.

1. Have a durable power of attorney signed by your aging parent now, while he/she is still competent. If you don’t know how to do this, start with your local Agency on Aging, and ask for a referral to the right help.
2. When Mom/Dad starts to slip mentally, is declared incompetent by a doctor, or otherwise shows signs of being unable to make safe financial decisions, take charge and don’t hesitate. It’s what loving and responsible children do for their aging parents. Use that power of attorney and take over. That’s what the document is for. Protect her or him from being a victim of abuse.
3. If you are reading this when your elder is already incompetent, and wouldn’t know what he’s signing, forget trying to get a power of attorney. It’s no longer legal to get a signature on something an elder can’t understand anymore. You have to see an attorney and get a guardianship/conservatorship.

If writing this saves one single person from being ripped off, I would be very happy. I am urging everyone with aging loved ones to take a hard look at your own parents. Your denial or theirs about their vulnerability carries too high a price.

To get more specifics about what to do if your parent is not able to handle finances anymore, see the short booklet, How to Handle Money for Aging Loved Ones, part of The Boomer’s Guide to Aging Parents, available at AgingParents.com or on Amazon.
© 2009, AgingParents.com