The possibility of losing our independence as we get older can be upsetting to think about. However, confronting this potential reality and considering what to do if it should happen can be one of the most valuable planning steps you can take for yourself and your family.
For example, there may come a time when you cannot manage your finances. You might forget about transactions, miss bill payments or fall victim to financial scams that target seniors. Under these circumstances, you should have a plan in place to protect your assets and money.
If you cannot manage your financial situation anymore, you want someone to take care of your money matters for you. This person should be responsible and trustworthy. He or she should understand your wishes in terms of lifestyle, spending habits and asset preservation.
Designating this person by assigning power of attorney (POA) allows you to have some control in naming the person controlling your finances.
Depending on the type of POA you choose, the assignment can go into effect immediately or only if you are incapacitated.
Protecting financial access
Seniors can be especially vulnerable to scams and financial fraud. Often, people target them to get their personal information, access to bank accounts, or cash.
To minimize the risk that you could fall victim to these efforts, you should protect access to your financial accounts.
Place reminders by the phone and computer to never give money or personal information to people online or over the phone, even if they claim to be your family. You might also grant access to your accounts to a spouse or other trusted party so that he or she can monitor your activity and spot any suspicious spending.
Asking for help
Too often, seniors find themselves in serious financial trouble because they were ashamed or embarrassed and did not want to ask for help. However, understand that there are long-term consequences of issues like missed mortgage payments, credit card debt and fraud, and there are parties and resources available to help you prevent them.
Thinking about what you can do now to protect yourself in the event of incapacity can help you make clear, rational decisions. Solutions can include talking to an attorney or financial professional about managing your money now and in the future.