Have candid conversations. Put wishes in writing. Don’t just make a will. What about the last 10 years of life? Plan for that, too.
“It’s so easy for someone in physical or cognitive decline to fall victim,” says Amy Peterson, VP Senior Trust Officer at City National Bank in Nashville, TN. “And once a life savings is blown, those assets are usually never recovered.”
For almost 25 years, Peterson has helped clients plan for their final years of life. She’s also seen some of them suffer devastating financial losses at the hands of predatory con artists, who are experts at finding a need to fill or a vulnerability to exploit. “They pull on those heartstrings, or get people worked up into a panic,” Peterson says — for example, by convincing them a bill is past due, a niece is in trouble abroad and needs cash for medical bills, or a guaranteed no-lose investment opportunity is only available right now.
Sometimes caregivers worm their way into a family’s confidence and take advantage of their trust. “Hired caregivers start writing themselves checks or try to influence that person to change the will,” says Peterson.
“With my mom, I’ve said, ‘When you’re ready, we need to have this conversation. I want to know your wishes while you can still tell me.’ And I’ve just brought it up every day.”
For Peterson, the most heartbreaking cases are when the betrayals — and even abuses — are at the hands of a family member. She recalls one woman whose children resented the money she was spending on in-home care and had her involuntarily committed to a hospital. One call to an attorney, and the trust company team appeared at the hospital at 2 a.m. to get the woman discharged. They set up security on the home to keep the family away. “Those are the hardest stories. But that’s when I feel I’ve done the most good.”
Because many victims blame themselves, and may also have memory impairments, elder financial abuse is underreported and difficult to prosecute. That’s why it’s far easier to protect an elderly loved one from fraud before a life savings is wiped out than to recover the losses after the fact.
Which is not to say it’s easy, says Peterson. She’s facing these issues now with her mother, who has Alzheimer’s. “Being from the Deep South, I understand — it’s really hard to talk about this,” she says. “But with my mom, I’ve said, ‘When you’re ready, we need to have this conversation. I want to know your wishes while you can still tell me.’ And I’ve just brought it up every day.”
Below, Peterson offers her advice, as a trust officer and a concerned daughter, about how to help a loved one safeguard their assets and live according to their wishes in their latter years.
Talk candidly — before it’s too late.
Talk to your aging loved one about how they want their final years to look — where they want to live, what they would want in various hypothetical situations, and to whom they would entrust private information. “Make sure someone they trust knows where everything is,” says Peterson. Passwords. Account numbers. Safe deposit boxes. “So they can fix things when something happens.”
If the loved one puts you off, keep trying — gently. “We need to have these conversations before someone starts to lose intellectual or physical capacity,” says Peterson, “so when they can’t trust their own judgment, those legal structures are in place.”
Don’t just talk about death. Talk about end of life.
“We are living longer,” says Peterson. “It’s hard to talk about mortality. It’s just as hard to talk about incapacity. Clients come to me with a will, and I say, ‘This is great! It tells me what needs to happen after you die. What about those last 10-15 years when you’re here? What have you done to let me know how we should take care of you?'”
Even better: Have the loved one make a video recording of their wishes or write them down and sign the document. “If you start to lose a person, you can show it to them,” says Peterson. “My sister has joked about the movie ‘Fifty First Dates,’ like, we should have a video to remind Mom what’s up, where she is, who loves her.”
Erect barriers to potential predators.
A good way to keep scammers from preying on your loved one is to filter communications from strangers. Ask the family member to hold off on answering mail until you can go through confusing bills or too-good-to-be-true offers with them. Or have mail forwarded to a family member or an executor to handle. And advise them not to answer the door to strangers or answer calls from unknown numbers.
“You are a buffer,” says Peterson. “Help them navigate these problems and make an informed choice. That can be enough to prevent a catastrophe.”
Protect personal data.
Fraudsters can use small amounts of information to steal identities or benefits. A phone scammer might pose as a doctor or Medicare caller and try to get a Medicare ID, social security number, or birthdate.
Coach your loved one to let calls go to voicemail and respond to them as needed. Offer to review the messages and make those callbacks on your loved one’s behalf. “My mom does not answer phone calls from unknown numbers,” says Peterson. “They leave a voicemail, and WE call back.”
Talk to a family or estate planning attorney.
You don’t have to be wealthy to hire an estate planning attorney. But before you go, talk about what your family member wants and write those things down in a notebook. Be specific: Is there a daughter with special needs who needs lifelong care? A grasping son who’ll want more than his share? Do they want assisted living or at-home care?
There are plenty of family attorneys out there who won’t overcharge or try to sell you on complicated end-of-life plans — it can be a relatively simple document. “But you need to gather your thoughts and goals before you go in,” cautions Peterson. “Don’t pay the lawyer for a therapy or brainstorming session.”
Have a power of attorney.
Power of attorney means you’ve given someone authority to act on your behalf in legal or financial matters. It can be narrow or broad, simple or complicated. You can ask your insurance agent or banker for sample documents.
A power of attorney can sign documents, open and close accounts, and communicate with banks on someone’s behalf. They should also keep an eye on bills, accounts, or credit card statements and sound the alarm if strange charges or expenses appear. “You don’t have to have a lot of money to do it,” says Peterson. “There are a bunch of tools out there. But I always encourage people to talk to an attorney.”
Of course, the power of attorney can be abused, too.
That’s where a living trust comes into play.
Consider a living trust.
“A living trust is basically a bucket that holds assets,” Peterson explains. And that bucket comes with detailed instructions about how the assets should be used and who makes those decisions.
In other words, a trust is a legal document that designates a trustee to manage someone’s assets. The person who creates and funds it is their own trustee for as long as they can be, and the successor trustee takes over those roles when the person can no longer care for themselves.
The trust adds another layer of protection for the grantor. “That trust document will allow an objective third party to step in if the family is taking advantage,” says Peterson.
Granted, not everyone can afford a living trust. But anyone can take at least some of these steps to help parents, grandparents, or aging friends set up systems to protect their assets as they grow older and, potentially, lose the ability to advocate for themselves. “For family members and chosen family — i.e., lifelong best friends or romantic partners — we’ve got to trust our instincts,” says Peterson. “It’s a delicate situation to step into. The person might be offended or afraid. But it’s important for us all to take care of each other, even when it’s hard.”
About the guest:
Amy M. Peterson serves City National Bank as a Vice President and Senior Trust Officer. Amy is active with the Tennessee Kidney Foundation, where she serves as Secretary of the Board of Directors. Based in Nashville, Amy works directly with clients and advisors to high net worth individuals and families helping with estate planning and trust administration. She has nearly 20 years of trust and wealth management industry experience.
Prior to joining City National Bank, Amy worked for SunTrust Bank and Cumberland Trust, both in Nashville. She earned her bachelor’s degree from Huntingdon College in Montgomery, AL, and received her MBA from Belmont University in Nashville. The views expressed herein are not necessarily those of City National Bank or its affiliates.
City National Bank, as a matter of policy, does not give tax, accounting, regulatory or legal advice. Rules in the areas of law, tax, and accounting are subject to change and open to varying interpretations. Any strategies discussed in this article were not intended to be used, and cannot be used for the purpose of avoiding any tax penalties that may be imposed. The strategies were not written to support the promotion or marketing to another person of any transaction or matter addressed. You should consult with your advisors on the tax, accounting and legal implications of actions you may take based on any strategies or information presented taking into account your own particular circumstances.