[Amy]

As we get older, we are more likely to be victims of financial fraud due to our cognitive deterioration. Are there ways I can set up my finances to prevent this?

I will not likely have any family member or someone I trust in my 80s.

Would I be able to set up a trust that limits how much I can withdraw monthly?

[Sunny]

Who will be your guardian and make medical and financial decisions if you are incapacitated?

That’s probably where you should start.

[Fles]

Criminals these days are monsters, especially the ones going after older people. My dad was cognitively ok, just a little naive, and fell for something. 600,000 euro lost.

He was so emotionally destroyed from the ordeal that he died of a heart attack 2 years after.

Another friends dad (also cognitively ok) lost 800,000. Very wise to be thinking of this now.

[Wendy]

you can appoint a professional fiduciary to assist you with this. I just interviewed several last week because I have a son with special needs and plan to have a professional fiduciary as successor trustee to manage his special needs trust and medical care.

I don’t want my other son or family members have to do this. Get referrals from friends or your estate attorney.

[Ashley]

I also encourage everyone to at least understand where your household money is and know how to access it. Going through that with my FIL right now.

My MIL handled everything and when she passed suddenly he had no idea how to do anything with the online banking, etc.

Thankfully, she kept an updated list of passwords and we’ve been able to get into everything that we know about.

[Kara]

You can put your assets in a trust during your life, and have a professional trust fiduciary manage it for you instead of managing it yourself.

There are banks and attorneys who do this work. Kind of like an annuity does, it takes away your power to make changes later, and applies a more general standard of reasonableness to disbursing money.

This can be more flexible than an annuity, depending on what instructions you give the fiduciary. To explore this option, consult with an estate planning attorney.

[Rebecca]

Childfree wealth podcast just had an episode that touched on some of these topics.

I find in general that podcast helpful in terms of realistic planning for end of life.

[Joel]

It’s a tough issue, especially if you don’t have a spouse, kids, or friends you can trust to help you.

Here are a few things we have done:
– Documented and reviewed warning signs with Spouse and Family. Gave them verbal and written permission to intervene and discussed what this would look like.

**This is one of the most important protections.
– Setup Durable Powers of Attorney, Trusted Contacts, Authorized Representatives etc.

– Have a Detailed Retirement, Estate, and Investment Policy Plans.
– Have a detailed “Just-in-Case” binder (ours is electronic) with all the needed information.

– Established a relationship with a Financial Advisor (hourly for now, switching to Flat Fee) who has reviewed our material and understands the strategy.

**In California, Financial Advisors are Mandated Reporters for Elder Abuse. Not sure how other states handle this.

It’s actually a significant responsibility (as an Adult Ed Teacher, I am also a mandated reporter).

It’s not perfect but it’s the best I can do for now. I keep looking and fine tuning.

[Melissa]

Be careful who you trust. Find someone who is trustworthy for years before you would ever have to deal with mental incapacity.

Because of a friend’s experience with her wealthy grandparents, I would recommend a company where there are lots of eyes seeing your accounts.

Small companies with one or two planners have a greater capacity to take advantage (even if they strictly stay within legal bounds) than a company with a larger customer base and portfolio.

I still would pick someone who has a local person you can go see face to face (not a big faceless national corporation) just not one person with all the power.

My friend had a wealthy grandpa pass away. He had set up a Trust for his grandchildren that was administered by the trust dept of a local bank.

That part was fine, but he left the control of the rest of his wealth to his second wife with the understanding that his kids would inherit.

His kids had no say, but initially it was ok. That wife had no issue with the inheritance plans but she lived a long time and started losing mental capacity.

She put all of her trust in a financial advisor who she gave POA to.

His decisions were so bad as to border on incompetence, if they weren’t in fact illegal. He liquidated a lot of real estate and then invested the cash in areas that lost money.

He only ever took his “fee” But that was large and by the time she passed away and the kids received the money there was very little left. The kids weren’t blood related and couldn’t step in.

They tried to go through the courts but trying to prove that she had already experienced impairment at the time of the POA was virtually impossible and after she was completely impaired and in a nursing home it was too late.

She basically trusted the wrong person and there was nothing anyone could do but watch this man “earn” a lot of money by doing a very bad job and destroying family wealth that they knew had been impatient to their grandfather.

[Dustin]

Might look into someone who is a conservator. My mother did this for a number of folks, some were court appointed some were just unable so the families agreed to this service.

I remember one client who had gotten quickly cleaned of money from some Jamaican tax scheme.

He was sending 5-10k every week or so and finally the family found out and had his accounts essentially taken over to not commit more money to this scam.

[Tanya]

Following. I called our brokerage and asked what precautions they have in place if we started making wierd withdrawals or sending funds overseas when that’s not normal.

They told me that in the end, it’s our $ and we can do what we want with it.

Not a great response, so I’m interested in what others have to say on this matter

[Author]

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