Scams targeting the elderly are on the rise, and schemes are getting more deceptive and clever by the day. Don’t let your parents fall victim to financial predators. To prevent this from happening, you need to keep a watchful eye on their money.
In this guide, we’ll show you how to monitor your elderly parents' money and help them avoid scams.
Key Takeaways
Monitoring your elderly parents’ accounts ensures their bills are paid on time, their income and expenses are covered, and their money is protected from financial scams.
Use financial management platforms like Trustworthy to manage your parents' accounts.
Some signs that your parents' account may be compromised include unusual behavior on their credit cards and sudden insufficient funds.
How to Talk With Your Parents About Financial Oversight
The sad reality is that elderly people are the main target of scams, and according to Psychology Today, more than 90,000 older Americans over age 65 were victims of fraud.
When having a conversation with your parents about financial oversight, it's important to be mindful of their feelings and talk in an understanding tone.
Nancy Murphy, a Schwab senior wealth advisory specialist, advises: “The challenge becomes figuring out how to do so in a way that feels supportive rather than condescending.”
For Murphy, this means starting the conversion slowly and gently. Ease your parents in by discussing relevant topics like current market performance or something you heard on the news. “Once they become more comfortable discussing the broad strokes, you can move on to more delicate subjects," Murphy says.
More delicate subjects include alerting them to scams and discussing their financial plans for the future. Remember to stay judgment-free and be respectful. If your elderly parents have not done a lot of estate planning, you can help guide this conversion by asking some what-if questions.
For example, you could ask questions like:
What if you got sick or injured and could no longer work?
What if you were incapacitated and your bills still needed to get paid? Who would be able to access your bank accounts?
These questions can help guide them on what their wishes are and can help you explain that you will need to monitor their accounts to protect their money.
Estate planning can be overwhelming and involves a lot of paperwork. Keep track of this planning by using a digital vault like Trustworthy. With the Trustworthy Family Operating System®, you can store all your documents in one secure location. Your documents will be easy to access and to share with others, such as your family members and financial advisors.
How to Gain Legal Authority to Oversee Your Parents’ Finances
Having a conversation with your elderly parents about overseeing their finances is all well and good until they cannot recall this conversation. Legally, you have no permission to take over certain aspects of their finances.
To avoid this headache, it’s a good idea to gain legal authority over your parents’ finances.
Steve Kibbel, a financial planner and managing editor at International Money Transfer, suggests:
“Set up a power of attorney (POA). This gives you the legal right to handle your parents' finances. You can set up a general POA (broad financial control) or a limited one for specific tasks. If they’re still mentally capable, this is the easiest and least stressful route. A durable POA is ideal, as it remains in effect even if they become mentally incapacitated.”
Depending on what was decided between your parents and an attorney, you may be able to make medical and financial decisions for your parents or simply be in charge of their accounts.
Store your power of attorney somewhere safe and easily accessible, like Trustworthy. Trustworthy has easy-to-use sharing features and advanced security measures like 256-bit AES encryption and two-factor authentication, and HIPAA and SOC 3 compliance to ensure you're protected.
If your parents were already incapacitated before they were able to appoint a power of attorney, you will need to get a court-appointed conservator. This process can be costly, but as a court-appointed conservator, you must file annual financial reports detailing how you have handled your parents’ assets and money.
So, it’s in your and your elderly parents’ best interest to appoint a power of attorney as soon as possible during estate planning.
Setting Up Online Banking Access for Easy Monitoring
If you’re assisting your elderly parents by paying their bills, managing income and expenses, and monitoring their monthly statements, you’ll need online access to their banking accounts.
To legally access these accounts, you will need legal authority, such as power of attorney or becoming a joint account owner, in addition to the provided login credentials.
If your parents can’t or won’t share their login credentials, but you have the legal authority to obtain them, you will need to visit the financial institution with your power of attorney documents and have them create new credentials to use.
Store these online credentials somewhere safe, like Trustworthy, so that you do not lose them and they’re safe from online threats.
Using Financial Management Apps to Monitor Accounts
One of the best ways to effectively manage your elderly parents' money, whether it’s just assisting with payments, setting up a budget, or managing their income and expenses, is by using a financial management app.
There are numerous apps you can download on your computer and smartphone that are easy to use. These apps have features that allow users to create budgets and stick to them, create spending goals, and even highlight areas that are a problem. You can use these apps to monitor what money your parents are spending and where.
Trustworthy’s finance tab feature allows you to keep your parent's bank accounts, loans, and investments. Create a budget and use the collaboration features to share it with the relevant people. The reminder feature prevents you from missing important payments, thus avoiding late fees and extra interest charges.
Tracking Monthly Expenses and Bills for Elderly Parents
Are you dealing with a senior shopaholic? This is a surprisingly common problem. Many elderly people may often spend more money on shopping than they did when they were younger, and there are multiple reasons for this.
For many elderly people, shopping eliminates boredom, and going to the shops is more of a social excursion than purchasing things they actually need. Shopping can also be an emotional support that provides a mood boost.
Another big reason why you may find your elderly parents racking up their monthly expenses is that purchasing and spending gives them a sense of control, especially if they feel they need to make lifestyle changes due to aging. Sometimes, this spending is spurred by illnesses like Alzheimer's.
Whatever the reason, you will need to track your elderly parents’ monthly expenses to ensure there is enough money each month and that money is not being used on unnecessary expenses. This also means monitoring their bills to ensure they’re paid on time and are the correct amount.
How to Spot Red Flags in Your Parents’ Financial Activity
As previously mentioned, elderly people are targets for scams. That’s why it’s important to know what red flags to look out for on your elderly parents’ accounts.
Some signs that something unusual is going on with a financial account include:
Unusual activity on credit card or bank accounts: If you monitor your parents’ account and spending, you’ll generally have an idea of what payments are going off and when to expect them. Watch out for frequent or unexplained withdrawals from the account or payments that your parents cannot explain.
Transaction without proper documentation: If multiple people, like caregivers and family members, have access to your parents’ accounts, keep an eye out for additional amounts being withdrawn or expenses bought without a receipt provided.
Sudden insufficient funds notice: If you’re suddenly receiving notifications of unpaid bills or insufficient funds, this could be a sign of unauthorized withdrawals from your parents' account.
You can use Trustworthy to keep track of your parents’ various accounts and the money coming in and out of them, especially if multiple people have access to the account. Use Trustworthy’s collaboration feature to ensure everyone has up-to-date information.
Protecting Your Parents From Scams
The first way to protect your elderly parents from financial scams is by making them aware of the scams and what to watch out for.
For example, one of the biggest scams related to elderly persons is a Social Security scam. Criminals will phone or email unsuspecting elderly people, impersonating the government in the hopes of getting elderly people to give up their Social Security numbers.
To prevent this from happening, you must be clear about explaining to your elderly parents about not sharing this information with anyone, and they should instead approach you first for help.
When you talk about scams with your parents or if they have become victims of a scam, remember not to be judgmental. The goal is to keep the line of communication open. Some things you can implement to further protect your elderly parents include:
Using a credit freeze.
Setting up your parents’ phone to send unknown numbers straight to voicemail.
Setting up stricter privacy controls on social media.
Frequently Asked Questions
How should you educate parents about scams?
Remember to educate means to communicate and not dictate. A great way to educate your parents on scams is to share how-to articles with them and emphasize that these are the resources that you personally use as well.
What are the signs that my parents are victims of a scam?
If your parents haven’t outright told you, they may be embarrassed. Some signs to look out for include a sudden reluctance to talk about finances, an inability to suddenly pay for things, and a high number of incoming messages or calls.
What happens if my elderly parents refuse my help?
First, you need to remain calm and understanding, as giving up control can be scary for the elderly. Don’t push the matter. Rather, try to have an open discussion and involve the family.
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Trustworthy is an online service providing legal forms and information. We are not a law firm and do not provide legal advice.
