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April 4 2008

Is It Time You Help Your Parent?

By <INLINK '275'>Neil L. Kimball</INLINK>

Is It Time You Help Your Parent?

Many adult children today find themselves caring not only for their own children but also for their parent. This is a difficult transition for the adult child who has always thought of their parent as strong and independent. It is also difficult for the parent because they need to accept that they are losing some of their faculties and are now vulnerable and in need of assistance. The challenge for the adult child is to know when to move from the traditional role of a child to that of a caretaker for a parent. Depending upon the personality of the parent and the child, this transition may not be so difficult. However, elderly individuals naturally tend to deny their vulnerabilities and try to maintain control and personal autonomy. In addition, most children do not wish to overstep their bounds and seem disrespectful to their parent.

This role change comes primarily as a result of the parent's diminishing capabilities, whether mental or physical. Mental capabilities can fade as a result of dementia, depression or both. This may lead to increasing disorganization in the parent's life that was not present while the parent was healthy and vibrant. Unfortunately, the child often does not realize it is time to protect his or her aging parent until it is too late and the parent has already fallen victim to predators or have otherwise wasted assets.

This natural reluctance to get involved in a parent's personal matters and finances can result in unnecessary vulnerability. When a child sees some of the signs that his or her parent may need help, it is best to take action and the child should discuss with the parent the advantages of becoming involved in the parent's personal and financial matters. A child might acknowledge the fact that the parent has taken care of him or her for so long and now it may be time to allow the child to assist the parent in making sure that all their finances and other matters are taken care of appropriately. If there are other children, it is best to work as a team to discern the best approach in discussing these topics with the parent.

Part of the assistance the child should undertake is a review of the parent's financial situation in general, how the parent's assets are titled (whether individually or jointly), whether the parent's estate plan is in order and whether the parent requires additional care or assistance. The parent might need help exploring various living arrangements, health insurance coverages, medical treatment options and investments. In addition, the parent might need help with taxes or determining whether Medicaid eligibility is an issue. The child should reinforce that they are attempting to assist the parent to protect the parent and the parent's assets for the parent's benefit, not the child's benefit.

Compounding the problem of this natural transition for both parent and child is an increasing incidence of fraud perpetrated by those who prey on the elderly. These predators are aware of the fear that permeates this time in a person's life. Some of the warning signs of predatory practices are: (1) using fear to sell a product or a service; (2) the reliance on religious affiliation to sell; (3) individuals who are out on their own or from a company they have never heard of before; (4) people who bad mouth their competition or engage in other unprofessional behavior; (5) anyone who offers extraordinary gain with little or no risk; (6) anyone selling by telephone or door-to-door; (7) anyone encouraging investments or sales that are secretive; and (8) any sale or investment where the time to act is very short. These warning signs can reveal the use of undue pressure and perhaps an inappropriate motive.

There are some measures that one can take to avoid financial predators:undefinedundefined

  1. Ask for and check references.
  2. Determine whether or not they have a physical office and presence in the community.
  3. Avoid buying anything that is sold door-to-door or over the phone.
  4. Do not depend upon law enforcement for protection.
  5. Before investing or buying, talk to advisors and family members.
  6. Involve a family member that you can trust with your finances.
  7. Check over your account statements and 1099 forms at year end to make certain that they are consistent.
  8. Do not pay fees or taxes in advance for a "gift" or "prize."
  9. Do not give out bank account numbers or passwords.
  10. Remember that if it seems too good to be true, it probably is.
The more involved that the child is in the parent’s financial matters, the more protection there will be against financial predators. In addition, the child should work with trusted advisors including an accountant, attorney, financial planner and physician to make sure that all of the parent’s needs are met. This effort at the right time and in the right manner can ease the pressure and stress upon the parent who knows that a family member is looking out for his or her best interest.