How do you protect your money from your older self

[Deleted]

I've read YM for a couple years but never registered or posted. With this new board, I decided to register so I could bring up a few topics I've never seen addressed. Here's my first:

How do you protect your money for the time when you may not think as clearly due to age and/or senility? My father was always very sharp and would laugh at financial scam e-mails that he would receive. However, during the last several months of his life, he wasn't thinking as clearly and would forward me the scam e-mails that he received and ask what I think. At least he asked and didn't actually act on any of the scams.

It's easy to scoff and think that I would never fall for a financial scam but I'm actually concerned about losing my mental sharpness as I continue aging. It seems to be a difficult balance as I want to maintain the freedom to handle my finances in the way I want BUT I want to protect my finances from myself if I start to become mentally fuzzy.

What's a person to do?

[cronewitch]

Good question, I don't have a good answer for myself.

Mom is 84 and very wary of people trying to get her money, she seems fine but lives with my brother and he is on her accounts. She depends on him for dad to day advice so wouldn't sneak around to give money to scammers. She hangs up on phone calls from people she doesn't know and blocks the calls and doesn't have internet.

I am single and will be alone in old age, I am not one to believe things now so don't think I would fall for lines from people but you never know.

[Deleted]

I suppose you could arrange with someone you trust to only be able to spend X amount of dollars without consulting them, of course if you are truly senile you might 'forget' to consult with the person.

It could be a true problem because if you are truly independent and senile there really would be no way to save yourself from yourself.

[haapai]

I've never heard a satisfying answer to this question.

There was an interesting article on a related subject in the NYT a couple of months ago. Some folks believe that the loss of the ability to manage money is an early warning sign of Alzheimers. The main human interest story in that article was an IBMer who had done a fabulous job of managing his money for decades and then lost both the ability to manage money and everything that he and his wife had set aside. The money was gone long before the dementia was apparent.

It was a terrifying story. Nobody had any good answers.

I've heard terrible stories regarding professional conservators and doubt that they could be part of the solution.

[Deleted]

I really don't have an answer either. I know that with my folks they seem to have gotten tighter as they aged. It would be a waste of time for anyone to try to sell them (or cheat them) of anything.

[trimatty471]

Good question. My brother is bi-polar. And he is good while taking medication but when he goes off, he is bad with money. I often wonder how to protect him.

[Deleted]

I don't know that I want my kids to ever have control of my $$$, even for my own good. I doubt that I will fall for any scams since I am a disbeliever of most stuff I read.

But the loss of independence to spend my own money my own way would really bother me. I've tried to save enough so that they won't ever have to spend their own resources. So should they get to decide whether I "need" internet or satellite?

I'd also think there would be a tendency for most kids to try to "conserve the estate." Of course, that's so that there is enough so Mom doesn't outlive her money. But as PatStab said, the money has a way of disappearing as people make choices for others. There was a trust fund for my sister and my education after my father died. Education included a lot of stuff I didn't choose like piano lessons for twelve years (I have minimal talent or interest, but this includes college no less!), summer care (my guardian was a teacher!), etc. There wasn't what should have been there. It wasn't misappropriation but rather personal choices.

[Gardening Grandma]

This is something I've pondered for a while ever since my mother impoverished herself before her Alzheimer's was evident.

Next year, when my disabled DGD turns 18, I am going to enroll her in a trust account that is a joint project between the state and an advocacy group. The admin fees are very reasonable and the only way to pull funds out is for a designated person to fill out an application explaining what the funds are for and including copies of bills. That will keep her mother from accessing the funds (her mother and father are divorced and the mother is a piece of work).... The request has to be approved by the trust administrator (which is the advocacy group), so frivolous requests should be denied.

[cronewitch]

Dec 27, 2010 15:05:05 GMT -5 Gardening Grandma said:

This is something I've pondered for a while ever since my mother impoverished herself before her Alzheimer's was evident.

Next year, when my disabled DGD turns 18, I am going to enroll her in a trust account that is a joint project between the state and an advocacy group. The admin fees are very reasonable and the only way to pull funds out is for a designated person to fill out an application explaining what the funds are for and including copies of bills. That will keep her mother from accessing the funds (her mother and father are divorced and the mother is a piece of work).... The request has to be approved by the trust administrator (which is the advocacy group), so frivolous requests should be denied.

Good idea maybe a trust that gives the senior an allowance with extras being applied for and approved would work.

I knew a family with mentally challenged adult with a trust. His mom and brothers were trustees. He was pretty high functioning so his mom got him a job so he got a paycheck, I heard she paid the company to hire him. He had to pay his rent and buy his food from his paycheck. He had a check register he would take to us at the CPA firm to do his taxes. His family wanted him to live well and feel in control of daily spending but he didn't have access to his fortune.

If he wanted a car or something he had to ask the trustees and explain what he wanted then he always got it.

He wasn't allowed control to protect his money from people who would try to trick him. It would be easy for a woman to pretend to love him and marry him then divorce and get half his money or friends to tell him sob stories.

[Deleted]

I appreciate all the input and I guess I'm not too surprised that there isn't a clear answer. I guess I can only hope that I maintain enough sense to double-check with a trusted loved one before spending/investing significant sums.

[Deleted]

My Dad has told me that he wants me to manage the money if he can't. I'm pretty honored- one brother is a CFO and another is a tax partner at a big CPA firm. (Dad says latter brother has tunnel vision and all his decisions are made based on taxes.) I don't think it will be easy if it comes to that- you actually have to convince them it's time to turn over the decision-making and then keep them on a short financial leash. I can envision fights with the loved one because you won't let them invest in some sure thing. I hope ity doesn't come to that.

[Deleted]

Athena, I think by the time you are there, it isn't about investing anymore. I may be wrong (it surprises me how often I am), but in my old age it will be about spending. Should I be spending my $$$ as I am?

Maybe that's why I am so hesitant on this issue. I am going to get a pension so that's not investing. My other $$$ are in a target fund. So I am guessing that my kids won't have to make THOSE decisions (about investing).

Instead, theirs will be about quality of life, which might not match my point of view. Simple example: every time I have been in the hospital, it has never bothered me to have a semi-private room. It is cheaper, and I'm not planning on living there. I can see my kids insisting on a private room for "Mom's sanity," which really is their convenience/comfort.

[haapai]

Breaking the question down into two parts may lead to more hopeful answers. I've muddied the waters by bringing up Alzheimers and the loss of money management capacity that seems to precede other symptoms and diagnosis. There might not be anything that can be done to protect your money from your dementia.

On the other hand, there's probably several things that you can do to protect your money from your from age-related "fuzziness".

[Bluerobin]

Pegasus, I went through the same with my mom. She started trusting me more and more. Had she not gotten ill, I probably would have taken over her affairs within a few months. When she did get ill, the problem became moot, and I had to take over.
The way to do it is to give POA to someone you trust and be sure to keep in touch.

[Gardening Grandma]

The way to do it is to give POA to someone you trust and be sure to keep in touch.

This probably is the simplest, safest route. Other than DH, however, I don't really have anyone I'd trust that much other than my sister. Since she is close to me in age, that probably would not be a good idea. My SIL might be a good choice. She was an attorney (no longer practicing), has enough wealth of her own, and is scrupulously honest.....and she's 10 years younger than me.

[keiks]

my aunt's parents have this problem a little. they started mail ordering items (aka mail order junk) bordering on hoarding. she tried to get her father to stop but he was pretty upset about her trying to prevent him from having things after he worked all his life. in the meantime there were mail order boxes that never got opened, and presents that never were given to people. tens of thousands of dollars of essentially junk. its hard cause her parents are very sweet, he just doesn't understand why he can't have that cool spatula and that fancy steam mop (and if you call in the next ten minutes, you get 2 for the price of 1!)....

ultimately i think the allowance is the way to go. it's just really hard to put someone you love and respect on an allowance and to deny them autonomy, even when it's for their own good.

[thyme4change]

Of course, I'm nowhere near this point yet (knock wood) but I've considered having a monthly meeting with both kids to review my finances and all purchases, with the understanding that as I slowly lose my mind they will already be in on everything. I would rather do it with both kids because even my lovable uncle robbed my Grandma when she trusted him. My kids could conspire to rob me, but then I would have to have 2 kids against me. I hoping they will keep checks on each other.

I'm assuming that my kids and I will be close enough, and that they will both be someone adult and responsible (no drug addicts, etc.) and that technology will be such that they can attend these meetings as holographs because at least one of them will be a senator or something. I'll deal with reality in 25 or 30 years.

[thyme4change]

Oh, I'm also lobbying our state to make mandatory driving and compentency tests every 12 months for anyone over 70. If they don't get that law into effect before I get there, I am going to keep my keys forever, and probably mess someone up bad. Hopefully it will only be myself.