Declining financial abilities may not only result in a few unpaid bills but also leave you vulnerable to financial abuse and drain your nest egg.
By ELEANOR LAISE, Senior Editor
From Kiplinger’s Retirement Report, April 2017
“After Robyn Downing moved in with her ailing father in 2010, she gradually uncovered a financial quagmire. She found he had eight different checking accounts at four different banks. ‘He was writing a whole bunch of checks’ to charities he’d never supported before, she says, and he hadn’t kept a checkbook register in two years. He owned several rental units, and one of his tenants hadn’t paid any rent in nine months, says Downing, a retired children’s theater director in Gladstone, Mo.
‘He was really being taken advantage of financially,’ says Downing, age 62, who estimates that her father lost roughly $50,000 before she stepped in to help. During the four years prior to her father’s death at age 91 in 2014, Downing consolidated his accounts at one bank, organized the bookkeeping for his rental units and discouraged his habit of giving his credit card number to anyone who called on the phone. ‘What a pain it was to try to straighten things out,’ she says.
Financial capacity—the ability to manage your finances in your own best interest—involves everything from paying bills to reading a brokerage statement and weighing an investment’s potential risks and rewards. And preparing for the potential decline of that capacity is as important as planning for long-term-care expenses or keeping your estate plan up to date. Declining financial abilities may not only result in a few unpaid bills but also leave you vulnerable to financial abuse and exploitation, drain your nest egg, and place heavy burdens on your loved ones.”