For more information about the author, click to view their website: Edward Jones
Do you have a parent or other elderly
relative who may soon need a caregiver? If so, be diligent when selecting the
right person for the job — because choosing the wrong one could lead to big
financial problems.
You
might find a close family member or friend to serve as caregiver — someone who
is honest and trustworthy, with good judgment and strong money management
skills. However, in many cases, people hiring caregivers just don’t know how
they’ll perform until the caregivers have begun work. A dishonest caregiver
could steal valuables or cash from the person they have been paid to assist or
incept their mail to obtain credit card numbers and other sensitive information
to commit identity theft.
So,
if you enlist a caregiver and begin having doubts about them, you’ll need to
watch out for these warning signs of possible financial abuse:
•
Efforts to prevent the individual receiving care from speaking to family
members
•
Inquiries into the location of estate-planning documents, such as a will
•
Interest in brokerage and retirement accounts, possibly with the intent to
change transfer-on-death designations
•
Withholding financial or medical information from the family
•
Missing jewelry or property
•
Requests to be a joint holder on bank or brokerage accounts, sometimes followed
by large cash withdrawals paid to the caregiver
•
Request for legal authority, such as a financial power of attorney naming only
the caregiver
This
last item — the request for financial power of attorney, or POA — is
particularly concerning because of the scope of duties covered by this type of
authority. That’s why it’s so important that all family members understand what
a financial POA can and cannot do.
A
general financial POA provides the agent with the authority to act on
behalf of an individual’s finances, while a limited financial POA gives
the agent the authority only for certain actions, such as paying bills, making
withdrawals and opening or closing bank accounts. A general financial POA and a
limited financial POA both can be durable, which means they take effect
once executed, or springing, which is contingent on a specific event,
such as a physical illness, mental incapacity or even a hospitalization.
Unfortunately,
some POA agents have abused their responsibility by stealing money, making unauthorized
transactions and even attempting to change the beneficiary designations on
retirement accounts or insurance policies owned by the people for whom they
provide care. These beneficiary designations can even supersede the
instructions left in a will or living trust — and they can’t be changed by a
financial POA.
If
you suspect financial abuse by a caregiver, you can consider contacting your
loved one’s financial advisor or attorney, if you know who it is. While they can't
share information with you, they can check for red flags and contact your loved
one directly. You also can get help from your state government. The National
Adult Protective Services Association (NAPSA) provides a listing of offices in
each state at napsa-now.org/help-in-your-area.
Finding a caregiver for a parent or other elderly relative can be emotionally difficult — but it doesn’t have to be financially draining. Get to know the caregiver if you can and watch for any red flags, so you can take comfort in knowing that your loved one’s finances are in good hands.
Chad Choate III, AAMS
828 3rd Avenue West
Bradenton, FL 34205
941-462-2445
[email protected]
This article was written by Edward
Jones for use by your local Edward Jones Financial Advisor.
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