I have spent the last several columns addressing how family relationships, and the complications of life, can create very real risks to your estate plan. Most of the time these risks are unintentional . . . but not always.
Financial abuse costs seniors 2.6 billion annually, according to a study by MetLife. In the majority of those cases, family members and caregivers are the culprits. The Justice Department warns this abuse can occur in several ways
- Borrowing funds without repaying.
- Cashing checks without permission.
- Transferring ownership of property.
- Committing identity theft.
- Denying services to save money.
This type of abuse often occurs when a parent has added a child to the parent’s account or has given that child a “power of attorney,” which conveys authority for that child to act in place of the parent. I have addressed the important role a power of attorney can play in a proper estate plan. However, because the document provides so much power -- in some ways more power than handing your child a blank check -- it should be used with appropriate safeguards.
Unfortunately, exploitation of a parent can also occur in more subtle, but equally serious, ways. Probably the most common example is the child repeatedly asking for money or asking the parent to bail the child out of his or her own problems.
Obviously, the parent/child relationship changes significantly from the time the child is young to the time the parent is a senior. When the child is young, the parent should be drawing the lines of appropriate behavior. But if that dynamic continues into the parent’s golden years, a child’s immaturity turns into exploitation. This is especially true if the parent must deal with inappropriate requests while attempting to maintain a close adult relationship with that child; all while dealing with the infirmities of age, loneliness, failing health, etc.
The line between a healthy relationship and an exploitive one is not always obvious. But for the benefit of the parent, and the family relationship, it is important to be aware of these risks.
© 2015 Steven J Wright