Financial Precautions
At some point, most elderly people will panic to some degree about living on a fixed income or the fact that their life savings are slowly dwindling. The reality of the fact that they are no longer earning an income and building up this account begins to set in and frightens them. This makes them vulnerable to any number of get-rich schemes and scams.
Many financial institutions have specialists who oversee and help manage accounts for their customers. These accounts may require a significant balance, or the service may be available to all bank customers. If a significant balance is not required, an account can be set up that requires two signatures on all checks; one of them has to be yours or another family member, not just both of your parents.
It is also advisable to consider having an account in which only a small balance is maintained. This would be the account from which household bills are paid and purchases made. The majority of funds are kept in a separate account and transferred as needed. This way, if a checkbook is stolen or debit card purchases are made from nonsecure transactions, only a small amount of money is at risk.
How do you protect them from these scams?
Some people are naturally much more vulnerable to being swindled than others, but don't count anyone out. One way to help protect your loved ones from being scammed is to have parameters set on their financial accounts so withdrawals over a certain amount need approval. This can be an approval from the bank manger or other financial officer, or by a designated family member. This approval can be cumbersome in times of true need, but it can mean the difference between holding onto and throwing away a lifetime of savings.
Should your parents be persuaded to make donations or invest money, they can't write checks for huge amounts of their savings. It makes it easier for them to honestly tell someone they don't have immediate access to that amount of money, and it serves to remind them they can't spend or invest large amounts of money without approval. If someone is trying to swindle them, they may think twice before having to justify their sale to a financial advisor.
If your parents or in-laws have a caregiver who may be tempted to spend their funds, this also helps control the amount of money that could be misused. Credit cards with lower fixed limits can also be helpful to prohibit extravagant expenses by your loved ones as well as any others who might exploit them.
This may be a very sensitive issue to approach with your parents, but reminding them these funds are not limitless and must be protected, as well as giving them the control to choose who gives approval, may help ease the situation. If there is any question of mental stability or dementia, access to funds must be controlled.
