Financial Insights

Powers of Attorney Considerations

The incidence of Alzheimer’s disease among those 85 and older is reportedly about 47%.  This population is growing and needs help with financial management.  As we’ve also discussed in other commentary, we all become more susceptible and targeted for elder abuse and fraud as we age.

Although it happens to all types of people, studies have shown that folks with a higher level of education and obtain more wealth are actually more vulnerable.  Research from Fidelity has also reported that keeping mom and dad in their home and safe from fraud and elder abuse are the number one and two concerns for adult children.

As a result, we typically assign money and health care management to other trusted family members when a loved one can no longer act in their own best interest.  The most common tools to permit a family member to assist with handling an elderly person’s assets are a financial power of attorney and a health care proxy, which we’ve previously discussed as essential estate planning documents.

Unfortunately, these documents can also be an avenue that leads to abuse, both financially and physically.

While naming someone to act on our behalf when we cannot remains critically important, and where these documents serve this purpose, here are some additional recommendations to consider:

When it comes to preventing elder financial abuse, a power of attorney and a health care proxy are essential as long as the powers it conveys don’t become a potential source of abuse.  Just recognizing that your loved one is a potential target for abuse may be enough to get the conversation going.  Regular family conversations about your loved one’s affairs are crucial.  Keep the conversations going, not only after a financial or health event, and make it part of your conversations if you get together on a regular basis.  If you don’t get together on a regular basis, then it’s a good excuse to do so.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.


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