At some point in their lives, many New Brunswickers will find themselves providing care for an older or vulnerable family member. In fact, one in four Canadians play the important role of helping an older loved one. As Canada’s population ages, this number will likely increase. A caregiver can play a crucial role in helping loved ones age in place.
Acting as a primary caregiver can come with a deluge of emotions and responsibilities and can be overwhelming. As a primary caregiver, you may be called on by your loved one to assist in dealing with your loved one’s finances. Knowing their financial wishes and understanding your responsibilities as their caregiver, or if appointed as an agent under their power of attorney, can ensure you are properly handling their financial matters. It is important to have conversations with loved ones about how they would like their finances handled later in life, or in the event of diminishing capacity – long before a loved one needs assistance.
Signs of diminished capacity
When someone is struggling with diminished capacity, they’re more likely to fall victim to financial fraud or be susceptible to financial exploitation. The following are signs that they may be struggling with financial decline:
- lots of unopened mail
- taking longer than usual to complete everyday financial tasks, like paying bills
- paying the same bill multiple times and not paying others
- decline in math skills, like figuring out the tax on an item
- decreased understanding of financial concepts, like interest rates
- uncharacteristic purchases
- general unkemptness of the house, especially if they are typically neat people
- making repeated calls to their banks because they forget their PIN number
How to help the older adults in your life protect themselves
You may have a parent or other loved ones experiencing diminished mental capacity to handle their finances, or you worry they may face that issue in the future. If so, consider the following steps to help.
- Have an open conversation about investments and other financial matters sooner rather than later. If these conversations are left too long, a health crisis or decline in cognitive abilities may make it too late.
- Help your relative or friend with managing finances, if they request your help and consent to you helping.
- If your family member or friend has named you to manage money or property (for example, by naming you agent under a power of attorney), understand your responsibilities and how you can properly and responsibly manage their money and property.
How to have a difficult talk about finances with your aging parents
Broaching financial planning for the future with loved ones isn’t the easiest conversation to have. Many older adults are uncomfortable talking about their financial situation. By disclosing their finances, they may feel they are losing control over their finances or that their autonomy or independence is undermined. Unfortunately, many grown children avoid the conversation — until it’s too late.
Try raising the topic when the entire family is gathered to celebrate a holiday. It ensures everyone in the immediate family is on the same page when it comes to their parents’ financial wishes for the future. A non-confrontational way to raise the topic is by turning it into them helping you: if something went wrong, you would be at a loss to know how to help them.
During the family meeting, ask the following questions, and cover the following topics:
- Do you have a will, trust or other legal document in place and is it current? If personal circumstances have changed since it was originally drafted, like a beneficiary has died, should it be revisited? If anything happened to you, where would I find this will?
- Have you appointed an agent under a power of attorney (POA)? If not, then consider it. A POA is a legal document that lets a person choose who they want to manage their affairs if they become unable to do so.
- Have you thought about giving your financial advisor authorization to contact a pre-selected and appointed, authorized emergency person, also known as a Trusted Contact Person? This could be a son or daughter or trusted friends, whom your financial advisor can contact should they be unable to get a hold of you, if you are showing signs of diminished capacity and they are concerned of financial exploitation.
- Discuss common scams that target older adults. It will help your parents identify, report, and protect themselves against financial abuse.
- For more vulnerable individuals, consider offering to regularly review their bank statements with them.
- Listen for names of new friends that always seem to appear in their conversations. Isolation is a big contributing factor to financial abuse and some scam artists prey on those who may be isolated and lonely.
- Establish a family code word. That way, when your parents get a phone call from someone posing as a grandson and asking for a $10,000 loan, they can ask for the code word to verify their identity.
For tips in starting the conversation, visit Sandwich Generation: Are you caught in the middle?